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ARTICLES BY FXPATH

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 About the author

            
Chen, CTA, CMT is Chief Technical Strategist at FX Solutions, a global leader in foreign exchange trading. He is also a registered Commodity Trading Advisor and a Chartered Market Technician.                                                                                                                                                                                              

Dec 06 2010 Aud/Usd

AUD/USD (a 4-hour chart of which is shown) as of Monday (12/06/2010) has consolidated in a flag-like price pattern after having broken out above several different resistance levels in the past several days, including the top border of a key parallel downtrend channel extending from the early November high. The current flag consolidation occurs after price action hit the 61.8% Fibonacci retracement level of the latest bearish trend (from the early November high to the late November low) at the end of last week. That 61.8% level was just shy of key 0.9950 resistance. In the event that the flag pattern is broken strongly to the upside, with a further break above the noted 0.9950 resistance, price action could once again target above parity to re-test the 1.0180 long-term high once again.

(Forex chart key: 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; Fibonacci levels in grey and/or light blue.)