AUDUSD—looks corrective

So far, the best that that AUDUSD has been able to do was a high of .9965 on Tuesday, only a few pips above the Nov. 22d high and failure point of .9954. The August, 1982 high was also .9965 (for what that's worth). The pair is hovering near the.618 retracement of the move from 1.0183 down to .9537. Price action since the beginning of the month looks corrective but as I've written in prior posts, the overall trend is still up. Last week's candle was very bullish which hints that the .9537 low may hold.

Immediate support is at .9747. If this breaks then it would show weakness. Next support is at .9537/07 (prior low and daily 100 SMA) and .9496 (where the C wave would equal the A wave). These would have to hold as it's likely sellers would pile in otherwise for potential lows down to .9125 (50% of the move from .8067 to 1.0183) and possibly .8770. On the upside, until it definitively closes over 1.0000, there's little to discuss.

Overall, I'm leaning bearish but of course price action will define whether I enter long or short. We're also getting into thinner holiday markets so moves might be more extreme. Caution is necessary.

Here's a daily 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.