(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.)
1/12/2010 – AUD/USD – Price action on AUD/USD, a daily chart of which is shown, has made a swift rebound after breaking down below a long-term uptrend in late November. This rebound has brought the pair close to the 15-month high around 0.9400 that was hit in mid-November. In the course of the recent bullishness price has broken out above several resistance levels, including a short-term downtrend resistance line extending from the 0.9400 high, and has tentatively defied speculation that a new downtrend is in the making. From an overall trend perspective, price is now essentially in a consolidation after having broken the long-term uptrend. If the current bullishness continues on to breakout above the noted 0.9400 high, price will have established a new 17-month high and could subsequently target further key resistance in the 0.9650 price region. To the downside, a breakdown below the most recent short-term uptrend support line extending from the late December low could target strong intermediate support in the 0.8950 price region.
James Chen, CMT
Chief Technical Strategist
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