Forex Technical Update

Previous: AUD/USD Holding at the End of a Harmonic Retracement (9/26)

AUD/USD 1H Chart 9/27/2012 1:55PM EDT

AUD/USD 9/27/2012 4H chart

The AUD/USD rallied after the a harmonic retracement noted in the previous update. The rally from the 1.0330 area  developed further in the 9/27 trading session, and extended during the US part of it, eventually break above a declining trendline that goes back to the September high at 1.0624, seen in the 4H chart.

Double 3? Note that the market is coming off 61.8% retracement and completed 2 sets of ABC corrections – perhaps a double 3 in Elliott wave terminology. If that is the case, the aussie-greenback is probably focusing back toward the 1.0624 September high.

Resistance pivots: First, let’s see how it reacts to the 1.0462 resistance pivot, last Friday’s (9/21) high. Clearing this opens up last week’s high and resistance pivot near 1.0515 (maybe even monitor the 1.05 psychological handle). Above 1.0520, we have the 1.0624 high in sight.

pullbackThe 1H chart shows the market pushing above the 200-hour SMA and closing in on last Friday’s high. The RSI tagged 70, showing some bullish momentum. Maybe in the near-term, it will become overbought. If there is a throwback in the late 9/27 or early 9/28 Asian session, we should see if the market can stay above 1.0430 and the 200-hour SMA, and if the 1H RSI reading can stay above 50. These would be good signs bulls are in charge.

However if price falls below 1.04, and RSI falls below 40, we continue to have a choppy correction with no directional bias in the short-term.

AUD/USD 1H Chart 9/27/2012 2:01PM EDT

AUD/USD 9/27/2012 1H chart

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.

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