AUD/USD advances to break consolidation
James Chen October 1, 2013 8:23 PM
<p>AUD/USD (daily chart) has advanced to breakout tentatively above the upper border of a pennant consolidation pattern. This pattern, most often considered a potential trend […]</p>
AUD/USD (daily chart) has advanced to breakout tentatively above the upper border of a pennant consolidation pattern. This pattern, most often considered a potential trend continuation pattern that represents a temporary pullback within a trend, occurs after the pair hit a high of 0.9527 two weeks ago, which was right at the 38.2% Fibonacci retracement level of the long and steep plunge from the April 1.0600-area high down to the August 0.8850 low.
In turn, that 38.2% Fibonacci retracement was preceded by an inverted head-and-shoulders reversal pattern (left shoulder around 0.9000, head around 0.8850, right shoulder around 0.8890) that occurred in July and August. The breakout above the head-and-shoulders neckline that occurred in early September provided further indication of a potential reversal of the AUD/USD downtrend. After reaching the 38.2% retracement, pulling back in the noted pennant pattern, and now breaking out tentatively above the upper border of that pattern, the pair could be poised once again to continue the upside reversal by targeting key resistance objectives at 0.9650 and 0.9850.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.