Forex Technical Update July 8, 2010 AUD/CAD Nears 0.92 Powerline
- Daily: The AUD/CAD pair rallied in June after a bullish divergence and has been very strong.=. A break above 0.89 and then establishing it as support was a very bullish sign.
- That was followed by a few days of strong rally into the 61.8% retracement level of 0.9123. The area between this and 0.92 should provide some resistance.
- Should the market break above 0.92, I will be waiting for a throwback to confirm an outlook towards 0.9400, which would be a 100% swing projection.
- However, we see that the momentum can still be held from breaking cleanly above 60. the market still has a decision to make at this powerline. What will the decision mean in the long-term?
- Weekly: If the market respects the 0.92 powerline, the bearish mode since November 09 will continue or, we have some ranging period to look forward to for the rest of the year.
- However a break above 0.92 with confirmation may suggest a continuation of the bullish mode started in March of 09. The market may still be in a ranging mode, but there would be a bullish bias.
- Don't take 0.92 as an exact level but a guide. The market may break above temporarily and still be bearish. That is why a confirmation from a throwback should help in the lower daily, or 4H time-frames.
Fan Yang Currency Analyst Commodity Trading Advisor
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