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AUD/USD 1H Chart 10/10/2012 8:01AM EDT

AUD/USD 10/10/2012 1H chart

ABC: The AUD/USD has found a bottom since the start of the week after falling from September’s high of 1.0623. The week has been one of corrective rally and this 3rd wave has its eye on the 1.0274 October high. an ABC correction with C=A wave equality targets the 1.0270 area.

More correction with bearish mode: The ability to push above 1.0275 and push the 1H RSI above 70 is a sign that the market is in a strong correction, but price action would already be indicative of this, though there is still some room to the upside even within a bearish mode that is shown in the 4H chart.

Target/resistance: A rally to 1.0330 satisfies a 38.2% retracement. It would also meet the 4H 200SMA as well as a common support toward the end of September. Also note that resistance can be expected if the RSI is around 60, assuming that the overall mode is still bearish. A break above 1.0350 and the declining trendline, with the RSI above 60, would be a sign of a bullish market in the making.

AUD/USD 4H Chart 10/10/2012 8:05AM EDT

AUD/USD 10/10/2012 4H 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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