(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; horizontal support/resistance line in yellow; Fibonacci retracements in grey.)

5/22/2008 – AUD/NZD – Price on the AUD/NZD long-term WEEKLY chart, as shown, has just bounced down off a very significant confluence of resistance factors today. The current bearish weekly bar represents a retreat from this strong resistance. One of these resistance factors is the long-term historical high in the 1.2410-1.2440 region, where a double top was reached in mid-2006. This level is represented by the yellow horizontal support/resistance line. Another resistance factor lies in the fact that price has also reached the top of a medium-term parallel uptrend channel before turning back down today. This parallel channel is represented by the two green lines. Oscillators like the displayed Stochastics are also indicating a bearish outlook, as they are in extremely overbought territory and starting to arc down. In the event of a further continuation of today’s bearish move, strong support resides in the 1.2000 region, which also corresponds approximately with a significant 38.2% Fibonacci Retracement level (the high-to-low retracement span being measured from the last touch of the channel’s bottom line to the most recent touch of the channel’s top line).

James Chen

Chief Technical Analyst

FX Solutions

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