spotfxtrader

So much for our expectation of resistance at .9805, as the rejection of the lows has carried the market back to .9894 and the long term ‘mean channel’ on the four hour chart.

So far the .9724 low which formed on the 16th, leaves a higher bottom in place and the market appears to be in some consolidation pattern below the 1.0182 high. The longer term outlook remains positive for the aussie, but the pattern of activity below that high appears to signal that the market has entered a longer  term period of corrective activity which should see lots of overlap of previous swings and could see the market ranging between 1.00 and the .95 area.

Above, we expect resistance at .9982 and 1.0070; while below we expect to find support at .9805,  .9717,  .9629, and .9540.

The decline witnessed in this pair is less pronounced than in others, but further downside appears likely, setting up a possible test of old low supports between .9629 and .9540.

Expect rallies to be capped by .9805.

OK so weakness has materialised, with a relatively sharp move back to the lower end of our band of targets near .9982. We are now sitting on what should be support,  suggesting potential for less impulsive weakness. In the event that there is no rejection of this support, we would then anticipate a probe of the band of consolidation extending back to .9805.

Should the anticipated weakness discussed earlier fail to materialise, the next upside objective is 1.0512

Looks like a pretty good hit of our 1.0159 objective, as the market appears now to have entered a period of consolidation below this level. Action off the high appears corrective and we now look for test of the band of consolidation between 1.0070 and 1.0026, with some possibility for an extension down to the .9982 area. The probability of that occurring will depend on how this pattern unfolds.

1.0159 remains the objective, but for now the market has stalled at the .9982 intermediate term objective.

AUDUSD stalls at .9982

If the current strength can clear .9938,  we should see a test of next intermediate objective at .9982  which more or less coincides with the upper boundary of the upchannel…

Yesterday witnessed new highs, as the recovery from the RBA rate announcement selloff  produced sufficient momentum to take out the July 2008 .9849 high.  Some consolidation back to the area of the previous highs around the .9720 – .9750 would not be impossible and this could develop into a more prolonged consolidation which would test the lower boundary of the uptrend channel somewhere around the .9660 – .9630 area.

But overall the next objective is 1.0159

Yesterday’s inaction by the Reserve Bank of Australia led to a nice pullback in AUDUSD, which took the market back into the last area of consolidation between the .95 handle area from September, the day’s low forming at .9540. This decline has failed to test the lower bound of the upchannel in place since the August low however, and the market subsequently snapped back to the highs where it has now paused.

The Aussie maintains its upchannel versus the USD

The market is below the .9849 high from July 2008 and looks set for further consolidation back to the lower boundary of the fast upchannel off the august lows.

We remain bullish on the Aussie however and anticipate new highs above 1.00