Forex Technical Update
AUD/USD 4H Chart 8/23/2012 7:40AM EDT
Yesterday (8/23), we noted that the AUD/USD was ranging between 1.0540 and 1.0410. The Friday(8/24) sell-off has pushed the pair below the 1.04 handle, breaking below this range. This puts in a top, which can be seen as a head and shoulders. Not only that, the drop has broken a rising trendline that held price action in the medium term, going back to the June 25 low of 0.9980.
The 4H chart shows the RSI kiss 30, then hold below 60, and now falling below 40, showing that bearish momentum is developing in this time-frame. The short-term bearish outlook for this break exposes the 38.2% retracement at 1.0220, to the1.0175 support pivot.
AUD/JPY 4H Chart 8/24/2012 7:50AM EDT
The AUD/JPY has topped off as well, and has also broken below a rising trendline, going back to the June 1 low of 74.55. This break also suggests that the break above July's range resistance of 82.40 was a false breakout. In this scenario, the market exposes the July range support area roughly between 78.50 and 79.35. This outlook is even more likely if we get a pullback that fails to push back above 82.50.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.