Forex Technical Update
Previous: AUD/USD at Key Resistance Again (11/23)
AUD/USD 4H Chart 11/26/2012 4:45PM EST
Consolidation: The AUD/USD pushed above the 1.04-1.0420 resistance area last Friday (11/23). If this area held, and the 4H RSI held below 60, the AUD/USD would have still been developing bearish momentum. However, the break makes the Aussie sideways, but now with a focus to the upside. The 1.0470 high on Friday (11/23) up to the 1.0480 November high represents the sideways consolidation resistance area.
ABC vs. bullish continuation: The ABC structure of the rally since Nov. 15 with a swing projection, or C=A makes warns of some market participants going short in this consolidation resistance area, especially because AUD/USD does not have a bullish bias in the daily time-frame. Now the pivot area around 1.04 will be important. A hold above suggests bullish bias, with a break above 1.0480 as further bullish continuation signal. However, falling below 1.04 brings in the possibility of further consolidation, which brings focus to the lower price levels of the November consolidation, just above 1.03. Further extension below 1.03 turns the consolidation from sideways (as it has been in November) to bearish.
Targets: The upside break (above 1.0480) exposes the July and September highs around 1.0620. A break below 1.03 exposes the 1.0150-1.0177 support area.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.