Forex Technical Update

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AUD/USD 7/26/2011 Daily Chart
- The AUD/USD is continuing the bullish mode. The daily chart shows above the record high at 1.1010 until the market pushed it above in the Asian session following higher than forecast inflation numbers from Australia.
- Note that this break continues an uptrend that has been intact insofar as staying above the 200SMA. The RSI also remained above 40 despite being cracked briefly.
- The break out opens up a couple of projections. Taking the width of the consolidation period and projecting to the direction of the breakout from the 1.1010 high targets 1.1590.
- A swing projection using the March-April rally from the lowest pivot of the consolidation zone targets 1.1690.
- The 4H chart shows a very sharp bullish push. A throwback would sees support at 1.0876.
Downside Risk:
- A break below that suggests the breakout to record highs is just a clear-out.
- A break below 1.0790 would be a major bearish signal confirming the clear-out action, which suggests a very sharp bearish move back towards consolidation support near 1.0440.

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Fan Yang CMT
Chief Technical Strategist