AUDUSD—drop to range bottom

AUDUSD has dropped below its uptrend line from January. The pair is currently offered at .9157 so it's moving towards the bottom of the April trading range (.9135 to .9391). On the hourly chart, RSI has entered oversold readings. When it broke below its uptrend line, upper shadows started to appear on the hourly candles, hinting that it was rejecting higher prices for now. However there are lower shadows, too, which hint that lower prices are being rejected. Basically, it looks like the same-old, same-old—indecision.

.9130 is support so it requires watching price action carefully if it approaches that level. If that fails, the 100 daily SMA is at .9074 and that has proven to be support in the past. WIth these two layers of support, one could attempt a small buy as it moves lower (if it moves lower).

Unless it definitively breaks out of the April range, there is no clear trend evident in this pair so any interim trades must take this into account.

Resistance is at .9214, .9300, .9324, .9364, .9384, .9406, AND .9579 Support is at. 9150, .9074 (100 SMA), .9039, .9002, and .8927.

Here's the one-hour chart:












© Dianne Fecteau, 2010. 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.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.