Forex Technical Update June 16, 2010 AUD/USD : Bearish Divergence May be a Bullish Signal


  • 4H: Indeed the AUD/USD may be in wave 4′ as discussed in the previous AUD/USD update. The rally has topped off, an indication of wave 3′ completion. I can't be sure that wave 4′ has not already been complete, but most likely wave 4′ would be a complex pattern because wave 2′ was a simple one. This is not a rule, but just a tendency.
  • The bearish divergence suggests a bearish attempt may be at hand, so we may have some decline or sideways action today.
  • It may be possible that a subwave a and b has been complete and a wave c is upon us.
  • This means the bearish divergence DOES suggest bearish action, but may be a clue to further bullish action if this bearish action is weak and does not break below the previous low near 0.85. This would develop a positive reversal setup.
  •  A wave 5′ can follow to finish wave (c). Then I will be looking for topping action and be prepared for an intermediate term decline.

  Fan Yang Currency Analyst Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.