(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
12/18/2009 – AUD/USD – Price action on AUD/USD, a daily chart of which is shown, has dropped to around the 0.8800 support level after having broken down below a significant triangle pattern consolidation. This occurs in the midst of a potential bearish reversal of the long-term uptrend that has been in place since the March lows. Displaying evidence of having developed a topping formation, this currency pair continues to have a bearish bias in line with recent U.S. dollar strengthening against all major currencies. In the event of further AUD/USD bearishness that drops below 0.8800, which would confirm a continuation of the trend reversal, price should target further downside support in the 0.8600 price region. Tentative upside resistance within the context of the current bearishness tentatively resides in the 0.8950 price region.
James Chen, CMT
Chief Technical Strategist
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