The upmove in AUD/USD from the May-10 low exceeded the major 2008 peak, but started to lose momentum in November. Bulls are now cautious and we here look at what the danger signs could be.

The FX Specialist view

MONTHLY CHART

The break through the 0.9849 2008 peak has met with resistance from the long term bull channel top, around 1.0300.

Thoughts have also crept in about a possible change in chart structure which would imply bull fatigue – see below.

DAILY CHART:

Resistance had previously been suggested in the FX Specialist Guide around a Fibo projection close to 1.0200. After the Nov-10 test of this the chart structure has changed, now suggesting that bulls have tired. This resistance area, including prior recent highs, has again been a barrier in Feb.

The rising support line (at 0.9965 now) offers first support, and a break below this followed by breach of the 0.9800 12-Jan low would provide the initial bear signal

A later drop below the s/term channel base projection around 0.9640 currently, would provide bear confirmation, with temporary support then looking likely around the 0.9405 Nov-09 high (near to the current 38.2% pullback level).

Mark Sturdy
John Lewis

Seven Days Ahead
Be sure to sign up for and receive these articles automatically at Market Updates

Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level techni44cal and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

© 2011 Copyright Seven Days Ahead - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Seven Days Ahead Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.