AUDUSD Weekly Musings

 After another open gap last week's price action spent most of it's time bouncing around .9400

The week ended with a sizable retracement leaving last weeks candle forming a bearish candle. 

This week I've included a monthly chart. A look at the monthly shows that we are at an area of strong resistance. Resistance to this level can be seen at the high of 2007, also at the start of the big crash in 2008, at the beginning of the current ranging period in 2009 and most recently April 2010. Indeed there is a strong case for the bears after last weeks candle. Support and resistance traders will be looking to go short around this price level using target levels of .9200 to .9000 for profit taking levels.

Now let's look at the other side of the coin - the trend traders looking for price to resume the longer term bullish trend which started early 2009. Price closed this week above any close seen for many weeks even months. Indeed price has closed above any other close in the range that began late last year putting alot of resistance between current price and any substantial move down. Also we are still 500 pips or so away from the all time high seen in 2008 of .9848 leaving plenty of room for price to move higher before S/R traders with an eye on larger time frames will be likely be rallying to short the pair again.

Where does all this leave me? Well I guess I could sum up my sentiment on this pair as short term bearish and long term bullish.

Thanks for visiting!

This is not a recommendation to trade.