Aussie Dollar Trying To Find a Base

The FX Trader’s view - From a July peak, the sharp drop back in AUD/USD has found some interesting support on the long term chart. Now the s/term bulls must do more to establish a base that can support a decent recovery.

• MONTHLY CHART: Of the major 2001-2008 upmove the market has retraced very close to 76.4%. This is sometimes a very effective technical level. BUT, the bulls have still to display better enthusiasm – see Daily chart below…
• DAILY CHART: We are looking at sets of retracements here. A close above the key 0.7000 area (23.6%/38.2%) would complete a small base pattern, and trigger us bullish. Some may use a close above falling resistance, around 0.6660 currently, as an earlier, riskier trigger. At that stage a drop back below 0.6289 05-Dec low would negate any bull signal. Our initial/minimum target would be the 0.7500 area, the next 38.2% level. Any buyers would likely look to take partial profits towards this level. Stronger resistance, however, could lie between the 0.7800 17-Sep low and 0.7925 dual retracement level.
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