(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 patterns in white; 50-period simple moving average in light blue.)

3/13/2009 € AUD/USD € AUD/USD, a daily chart of which is shown, has recently been entrenched in a prolonged consolidation right above a gradual uptrend support line extending from the October 5-year lows (around 0.6000). Within the context of this consolidation, price has also formed a triangle-like formation which was just broken to the upside earlier in the week. This break was neither strong nor fast, so price can still be considered as wallowing in a sideways consolidation near long-term lows. Two potential trigger points reside above and below that would, if broken, signal a directional breakout of this consolidation. To the downside, any substantial breakdown of the previously noted uptrend support line should target strong support around the 0.6000 low. To the upside, any significant breakout above the 0.6800 support/resistance level could ultimately target further resistance in the 0.7265 price region.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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