Price action on AUD/USD (a four-hour chart of which is shown) as of Tuesday (9/28/2010) has just established a new two-plus-year high and bumped up against key resistance in the 0.9650 price region after traversing a steep bullish trend channel extending back to the late-August lows.
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This bullish trend is just one leg of a longer-term uptrend extending back to the early-June low. In the event of a strong breakout above the 0.9650 resistance area, which would confirm a continuation of the current steep uptrend, the key upside resistance target resides around the very important 0.9850 price region, which represents the all-time high for the pair.
To the downside, a breakdown below the current steep uptrend channel could indicate the beginnings of a bearish correction in the longer-term uptrend, with an initial downside target in the 0.9465 support region.
By James Chen, chief technical strategist, FXSolutions.com
