Forex Trading: AUD/USD Stalled Near Resistance

Price action on AUD/USD, a daily chart of which is shown, has stalled and retreated around key resistance in the 0.7230-60 region. This occurs after price broke out strongly above a flag continuation pattern. The current resistance area is a highly valid support/resistance zone, as price has turned several times in this zone both in the recent and distant past.

Therefore, if price breaks out substantially above it, bullish momentum should be strong, and could eventually target the 0.7700 price region, a major support/resistance level to the upside.

Conversely, if the current resistance is ultimately respected, the 0.6800 region should serve as major support to the downside.

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Comment by Richard Gaulli

2009-04-03 15:08:34

As usual Mr. Chens analysis is impeccable.

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