AUDUSD—back at resistance
The Aussie drifted back to a high of 1.0753 overnight. Drifted is the correct word. The move did not have a lot of energy and one can see the lack of momentum in the diverging RSI on the one-hour chart. In doing this, it took out my short from yesterday at breakeven but I re-established it this morning at a better price.
As I wrote yesterday, on the daily chart, the picture appears corrective with a three-wave structure down to the 1.0441 price. The pair would be in the B wave. Given that the 1.0757 prior high was near the monthly 1.0746 pivot calculation as well as near the .382 retracement of 1.0724 (1.0257/1.1012), the fact that this is serving as resistance again this morning is significant.
It is true, though, that a pair that hangs around just below resistance can often break through it. Should it do so, the next resistance is at 1.0820 and then 1.0889. Support on the four-hour chart is at 1.0690 and 1.0634. The latter is the short-term support line but also at the 50% point of the 1.0257/1.1012 range. A break below 1.0600 opens up the possibility of
1.0567, 1.0441, and 1.0359.
Here is the one-hour chart:
© Dianne Fecteau, 2011. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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