AUDUSD Reverses Sharply after Testing May High
Prepared by Jamie Saettele, CMT
After testing the May high, the AUDUSD dipped Friday and took a dive today. There are 2 important patterns to focus on at the current juncture. The first is structure from the July 2011 top, which appears to be unfolding as a triangle. Triangles typically consist of 5 waves, labeled A-B-C-D-E. The rally from the 6/1 low is wave D but the jury is out on whether or not wave D is complete at 10443 or whether a final high will be registered (which is valid in the event of a diagonal from the 6/25 low). If a final high is in the cards, then the AUDUSD likely trades higher from near the current level (10250), which is defended by the 20 day average, trendline support, and 7/17 low (10235). The failure at the May high is enough for me to trade from the short side but only on strength above 10320 with a stop above 10390. A loose objective for the end of wave is 9800-9900.
LEVELS: 10155 10200 10235 10285 10320 10360
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