(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; 50-period simple moving average in light blue.)
2/05/2009 – AUD/USD – The AUD/USD (a daily chart of which is shown) is right above a critical confluence of support, and appears to be respecting that support in the midst of its general downtrend. The two main technical factors supporting price include an uptrend support line extending from the pair’s recent 5-year low hit in late October 2008, and a significant prior support/resistance level just above the 0.6300 region. Additionally, momentum oscillators like the displayed Stochastics are indicating a bullish emergence from technically oversold. Potential trading triggers may include any significant break and close above the short-term downtrend resistance line that extends from the last major peak hit at the very beginning of the year. In the event of this trendline breakout, the next major resistance target to the upside resides around the key 0.6800 support/resistance level. Any fall back to the downside should meet significant support around the level of the noted support confluence, in the 0.6300 region.
James Chen, CMT
Chief Technical Strategist
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