Chart of the Day
AUD/USD Daily Chart — October 28, 2009
By
James Chen
, Published:
10/28/2009
(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
10/28/2009 – AUD/USD – Price action on AUD/USD, a daily chart of which is shown, has displayed some significant U.S. dollar strengthening in the past several trading days, much in the same manner as other dollar-based currency pairs. But the strong uptrend in AUD/USD, which has been firmly in place since early March, is currently still very much intact. The current bull market correction in this currency pair has thus far constituted a normal, minor retracement after over-extending to the upside in a steep bullish run. That bullish run culminated in a 14-month high just above 0.9300. Any subsequent breakout above that high would confirm a continuation of the strong general uptrend, and could potentially target the all-time high above 0.9800, which also happens to coincide with a 161.8% Fibonacci extension of the last bullish run. To the downside, the highly significant uptrend support line extending from the March lows (which has thus far been respected at least 4 times) serves as strong dynamic support. Any substantial price breakdown below this trendline could place the current uptrend under a potential risk of trend change/reversal.
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James Chen, CMT
Chief Technical Strategist,
FX Solutions
Chief Technical Strategist,
FX Solutions
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