AUD/USD Backs Off Support, Continued Bearish Bias

AUD/USD (daily chart) as of Friday (9/23/2011) has backed off key support around the 0.9700 price region after having broken swiftly and strongly below prior key support around parity (1.0000). Friday’s price action rose up above 0.9800 from its half-year lows just below 0.9700. This pullback occurs after a precipitous 1100 pip drop that started in the beginning of September. After such a plummet, a bullish correction pullback is to be expected, with strong resistance now residing around the parity region. Overall, however, the directional bias continues to be strongly to the downside in line with the steep bearish trend that currently prevails. A re-breakdown below 0.9700 should target further immediate downside around the 0.9550 price region, and then the key 0.9400 support/resistance level, which is also the 161.8% Fibonacci extension of the last major bullish correction.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

Aussie Breakdown

AUD/USD (daily chart) as of Friday (8/05/2011) has dropped precipitously this week and has reached down to dip tentatively below key support around the important 1.0400 support/resistance price region. This occurs after price action hit a new all-time high at 1.1078 in the prior week, and then broke down just yesterday below a confluence of the 100-period simple moving average and a long-term uptrend support line extending back to the June 2010 low. Currently at a critical support juncture, price action could very well extend its bearish streak into next week. If price is able to break and stay below the key 1.0400 price level, the next clear downside support target resides around the important 1.0200 prior resistance region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

AUD/USD Pulls Back Within Strong Bullish Trend

AUD/USD (daily chart) as of Monday (8/01/2011) has consolidated around the key 1.1000 psychological price region after making a tentative upside breakout last week to hit a new all-time high around 1.1078, surpassing the previous all-time high set in May at around 1.1010. After having established the new all-time high, price action has wavered and retraced back under the key 1.1000 level. This bearish pullback, within the context of the overwhelmingly bullish overall trend, could bring price back down to approach or re-test key support around the 1.0800 price region. In the event of a resumption of the overall bullish trend that breaks out above the new 1.1078 all-time high, price action in uncharted territory could begin targeting the 1.1400 price region, which represents the 161.8% Fibonacci extension of the last major bearish correction (from the early May 1.1010 high down to the late June 1.0390 low).

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

AUD/USD Rises to Retest Key Resistance

AUD/USD (daily chart) as of Wednesday (7/13/2011) has once again approached a retest of key resistance around the 1.0770-1.0790 price region, which has already been tested and respected twice in the month of July. This resistance also represents the 61.8% Fibonacci retracement level of the last major bearish correction extending from the all-time 1.1010 high down to the 1.0440 area low. The current resistance retest occurs within the context of a strong overall uptrend extending back to mid-year 2010, and after a triangle breakout occurred in late June. Will this third approach of resistance finally result in an upside breakout? If this is to be the case, and price makes a strong breakout above this resistance area, the key upside target resides clearly around the 1.1000 price region, which would represent an approximate retest of the all-time high price region established in early May.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

AUD/USD Resumes Bullish Stance after Triangle Breakout

AUD/USD (daily chart) as of Thursday (7/07/2011) has resumed its bullish stance after breaking out above a key descending triangle consolidation pattern, hitting strong resistance around the 1.0780 price region, and then pulling back to 1.0650 support right around the 50-period simple moving average. This breakout-pullback-resumption is a technical price move that hints at potential further bullishness to come. This occurs within the context of a long-term uptrend for the pair. In the event that price subsequently is able to breakout above the 1.0780-1.0800 resistance region, the key upside target resides around the 1.1000 price region, which is not only a key psychological level, but also represents the region of the all-time high hit in early May. Downside support within the context of the current bullishness continues to reside around the 1.0650 support region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

AUD/USD Bullish Surge Breaks Consolidation

AUD/USD (daily chart) as of Thursday (6/30/2011) has continued its upside momentum after yesterday’s bullish breakout above a clear descending triangle consolidation pattern. This triangle breakout occurs within the context of a long-term, year-long bullish trend that extends back to the June 2010 lows. Now that price action has broken its converging consolidation, immediate upside resistance can be found around the 1.0775 price region. In the event of a further breakout above that level, the key upside target resides right around the 1.1000 area, which not only represents an important psychological figure, but also represents the region of the all-time high for the pair established in early May, as well as the very top of the noted triangle.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

Webinar Rebroadcast: Charting the Majors with James Chen

Please click on the following link to access the rebroadcast of today’s Charting the Majors with James Chen: https://www1.gotomeeting.com/register/465572601 .

AUD/USD Upside Pressure Looks to Break Triangle Pattern Consolidation

AUD/USD (daily chart) as of Tuesday (6/21/2011) has continued to languish within a large consolidation represented by a symmetrical triangle pattern formation. This converging consolidation has been forming since the all-time high of 1.1010 was hit in early May. Currently nearing the apex of this triangle, price action could soon make a significant breakout. As the overall trend has been bullish for at least a year, the directional bias for a breakout of this consolidation is potentially to the upside. If this bullish breakout occurs, the key upside target would be a re-test of the all-time high at 1.1010 once again. In the event that this triangle fails to serve as a trend continuation pattern, key downside support within the context of the longstanding uptrend continues to reside around the important 1.0200 price region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

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