(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.)
6/22/2010 – AUD/USD – Price action on AUD/USD, a daily chart of which is shown, has consolidated after a very substantial gap opened the trading week. Monday’s (6/21/2010) price action opened around 100 pips above the prior week’s close, but quickly pulled back and began filling the gap. Tuesday morning’s (6/22/2010) price action, as of early New York session, has continued to consolidate within the gap. This all occurs after a large double-bottom pattern was confirmed on a breakout above the pattern’s 0.8550 peak. The bullish upside target for completion of the double bottom pattern resides around the key 0.9000 price region. To the downside, if price subsequently breaks down below 0.8700, key further support resides around the noted 0.8550 double-bottom peak. Any further breakdown below the latter level would be a significant bearish signal that would potentially invalidate the pattern.
James Chen, CMT
Chief Technical Strategist
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