Forex Chart Of The Day: AUD/USD

(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

Price action on AUD/USD, a daily chart of which is shown, has tentatively broken down below both a short-term uptrend support line extending from the 3/10/2009 low, as well as a key horizontal support/resistance level around 0.6850. A daily bar close significantly below this level would be an important bearish indication that interrupts the bullishness of the last three weeks.

If this is indeed the case, any bearish follow-through should target support in the 0.6550 price region. Oscillators like the displayed Stochastics, which are emerging down from overbought, are providing some confirmation of a potential bearish turn.

To the upside, in the event of any subsequent breakout above 0.7100, a short-term uptrend continuation will have been confirmed, potentially targeting a re-test of 0.7265.

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