Forex Technical Analysis – AUD/USD Potential Double Bottom Low
6/10/2010 Forex Technical Analysis (FXpath.com) – AUD/USD, a daily chart of which is shown, has been displaying the potential for a double-bottom low pattern established earlier in the week just below the 0.8100 support region. Of course, this potential trend reversal pattern will not have been realized unless and until price breaks out significantly above the 0.8550 price region, which represents the peak between the two bottoms and is also a key resistance region in its own right. If, in fact, a significant breakout above this price area occurs, further bullish momentum could prompt price to target further resistance in the 0.8700 price region. To the downside, a downtrend continuation could only be confirmed on a breakdown below 0.8065, which is the lowest low of the double-bottom formation.
(Please click on the forex chart thumbnail to enlarge. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
James Chen, CTA, CMT (bio)
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