(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
Price action on AUD/USD, a daily chart of which is shown above, has broken down well below a short-term uptrend support line extending up from March lows. This occurs after price made a false break above the 0.7265 double-tested level, creating what amounts to a third test of resistance in the process.
Monday’s (4/20/2009) substantially bearish price action broke cleanly below the short-term uptrend support line, but has recovered much of its losses as of Tuesday (4/21/2009). Any continuation of the bearish breakdown below the mentioned uptrend line should target the key 0.6800 support/resistance region to the downside.
Upside resistance continues to reside around the noted triple-tested resistance zone, which currently resides in the 0.7300 region.By James Chen, Chief Technical Analyst, FX Solutions
