(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend line in red; horizontal support/resistance lines in yellow; chart pattern in magenta; 50-period simple moving average in light blue.)

1/09/2009 – AUD/USD – Price action on the AUD/USD daily chart, as shown, is currently within the boundaries of a thin parallel uptrend channel. Within the last few days, price has dropped to the bottom of this channel after hitting and retreating from key resistance in the 0.7250 region. Currently, momentum indicators like the displayed Stochastics are indicating a bearish bias, with price emerging down from extremely overbought. In the event of a significant breakdown of the current channel, the pair could target key support in the 0.6750 region. And any strong breakdown of that further support level would hint that the pair could be leaning towards a potential continuation of the overall downtrend. To the upside, the noted 0.7250 level should continue to serve as key resistance for the near-term. In the event of a break above that level, the top of the parallel trend channel should serve as significant further resistance.

James Chen
Chief Technical Strategist
FX Solutions

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