(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart pattern in magenta; 50-period simple moving average in light blue.)
1/28/2009 – AUD/USD – The AUD/USD daily chart, as shown, is currently displaying some short-term bullish characteristics after having languished in a prolonged horizontal consolidation near the five-year lows for the last several months. After having broken out above a large triangle (in magenta) towards the end of 2008, price subsequently broke out above a long-term downtrend resistance line (in red), and has since been riding the same line down, but this time as support. Just in the past few days, price has made a moderate push up off this line, potentially targeting substantial resistance in the 0.7000 region. Oscillators like the displayed Stochastics are supporting this potential bullishness, as they are pointing unmistakably up from prolonged oversold conditions. While strong support to the downside resides in the 0.6330 region, if price continues its upward momentum surpassing the mentioned 0.7000 level, the pair should target further resistance around 0.7250. And any substantial break above that level should help confirm a potential bullish reversal in the pair.
James Chen, CMT
Chief Technical Strategist
IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors.