AUD/USD Eyes 0.92



4H: Last week, the market showed that it wanted to keep the AUD/USD in consolidation and rejected any further breakout from the downsloping channel. (Refer to Daily Technical Update 2.12.2010 AUD/USD.)
The 4H time-frame shows the upsloping trendline holding and intact. The market is in fact accelerating the rally. The stochastic shows momentum clearly broken above to the bullish side and staying above 65 area, reflecting an aggressive run up in the short-term.
Daily: The daily chart shows the 0.917/0.920 area (78.6% retracement) is coincident with a downsloping trendline. This is a possible target for the current upswing. However, further rally beyond is also possible. This break continues the established uptrend, but I suspect it would be a terminal wave of the bullish cycle that began October 2008.
Weekly: The weekly shows a possible Elliott Wave count. The stochastic suggests an almost completed bullish cycle. The fibonacci expansion shows target for wave V if it comes out to be 38.2% of III at 0.9760. This is near the previous high. The parity level is a psychological level an a break means a possible wave V to 1.05 if it is 61.8% of III.
This final wave should not bring th stochastic to overbought levels. This would be a harbinger to a major correction. after testing the 1.00 area. But until then, we will stalk the current rally as a part of the consolidation, leaning on anticipation of a breakout to above the short-term target of 0.92.





Fan Yang
Currency Analyst
Commodity Trading Advisor
FXTimes


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