Base Completed in Aussie Dollar
09 January 2009
In Dec we looked at what was required for the Daily AUD/USD chart to complete a temporary base. These conditions have now been achieved, with shorter term bulls now in favour.
MONTHLY CHART: Of the major 2001-2008 upmove the market last year retraced very close to 76.4%, before finding support. This is sometimes a very effective technical level. The Daily chart below now suggests that bulls have done enough to prolong a recovery phase.
DAILY CHART: In Dec, the breaks through the falling resistance lines were followed by a close above the key 0.7000 area (23.6%/38.2%). This completed a small base pattern, and provided a final bull trigger (in our 11th Dec Update we suggested that some traders may have used a close above the first of these resistance lines for a bull signal). Continuation higher has been modest so far, but we currently still aim for the 0.7500 area, our initial/minimum target. Note that stronger resistance, however, could lie between the 0.7800 17-Sep low and 0.7925 dual retracement level, if reached. Ideally first support around the 0.6753 24-Dec low will hold, in order to preserve s/term bull momentum.
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