(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend lines in red; uptrend lines in green; horizontal support/resistance lines in yellow; chart pattern in dotted yellow; Fibonacci retracements in grey.)
4/11/2008 AUD/NZD The long-term AUD/NZD WEEKLY chart, as shown, is displaying some strong support/resistance dynamics at play. Perhaps most importantly, the horizontal support/resistance level around the 1.1750 region, as represented on the chart by the long yellow line, signifies a key long-term price zone. Multiple touches on both sides of this line are highlighted by the yellow circles on the chart. As of this writing, price has closely approached this level, which may currently act as strong resistance. In the event of a momentum breakout to the upside above this line, the next major resistance to the upside resides around the top of the parallel downtrend channel (the top red line). But the technicals are showing a slight bias towards the downside for several reasons, besides the long-term resistance posed by the horizontal yellow line. For one, the current resistance at the yellow line is reinforced by a key 61.8% Fibonacci retracement level (the high-to-low retracement span being measured from the swing high in early November 2007 to the swing low in mid-December 2007). Also, a relatively well-defined inverted flag pattern (in dotted yellow) is hinting at a downward continuation. And finally, this pair has been entrenched in a long-term downtrend since a price peak was hit in mid-2006. In the event of this downturn at resistance, the next major support to the downside resides around the medium-term uptrend line (the rightmost green line), and then further down in the 1.1150 region (the lowest point in the inverted flag).
Chief Technical Analyst
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