Forex Technical Update

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AUD/USD 4H Chart 8/22/2012 7:55AM EDT


The 4H AUD/USD Chart shows a market that has been trading in a declining channel against a larger rising channel. This week started with an attempt to break above the counter-trend channel. This however failed as the rally during the 8/21 session stalled at 1.0520, below the 1.0530 pivot. As we get into the 8/22 US session, the pair is back to test the risingchannel support.

Note that the RSI in the 4H chart failed to push above 60, which is a sign that the bearish momentum from the decliningchannel is still intact. A break below 40, with price breaking below 1.0410 is a breakout with persistent bearish momentum. However, if the RSI in the 4H chart bounces off 40, it reflects a consolidation momentum, and a sideways market. This keeps the bullish outlook open, with a break above 1.0530 opening up the 1.0613 high.

The daily chart shows the market in a rising channel, with momentum returning to neutral as the RSI regresses to 50. There's no clear trend here, and in such a sideways market, the further price is from the 200-SMA, the more "gravity" it has back toward it. At the moment, the 200-day SMA resides at 1.0290.

AUD/USD Daily Chart 8/22/2012 8:00AM EDT


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.