Friday May 16, 2008 - 15:47:19 GMT
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Chart of the Day - 5/16/2008 - AUD/NZD
(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; Fibonacci retracements in grey; 50-period simple moving average in light blue.)
5/16/2008 â€“ AUD/NZD â€“ Price on the AUD/NZD daily chart, as shown, has just bumped up against resistance within the context of a rather well-defined parallel uptrend channel. A true break of uptrend resistance in a channel is a sign of trend acceleration. If this break occurs, major historical resistance to the upside resides nearby, around the long-term double-top in the 1.2440 region. The current technical bias, though, is hinting at a possible exhaustion, or at least consolidation, in the short-term runaway uptrend initiated in late March. This is due to both the significant resistance imposed by the top of the uptrend channel, as well as confirmation from oscillators like the displayed Stochastics, which are starting to emerge down from extremely overbought territory. If this turn at resistance occurs, traders should be looking for a breakdown below the steep, short-term uptrend line (in green). In this event, the next major long-term support to the downside resides in the region of the historical support/resistance level around 1.2000. This corresponds approximately with the key 38.2% Fibonacci retracement level (measured from the recent short-term upmove).
Chief Technical Analyst
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