The  Chart  Manager

Earlier Australian Dollar Outlooks

 

• Unfolding triangle pattern to delay upward break
• Second retest of channel resistance ending
• New decline has been triggered
• Will the AUD avoid a drop to 0.6900?

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Outlook: Australian Dollar (AUD/USD)

Poised to challenge 1.0000 – but unclear whether now or later

April 25, 2008

When AUD rose through 0.8000 early in 2007 it put itself on a course to test the next major channel resistance around 1.0000. The rally has paused at intermediary channel resistances. The current price is now at the last intermediary channel resistance for the second time. Any rise through the recent high of 0.9540 (23/4/08) will result in a challenge of the major channel resistance soon after and complete a major trend sequence.

The uptrend from 2006’s 0.7015 low has not produced a decisive sequence, but one with overlapping segments and sharp reversals, and so adds an additional degree of uncertainty for the direction from the current position. As prices are rising again after making a high for the February time vibration suggests that prices can proceed immediately towards the major channel around 1.0000. Expect the high in line with the next time vibration rollover in August.

Price did exceed the February high last week but did not continue with the rally and closed the week below it. This action so means that the intermediary channel resistance that contained the rise in February is still active. It creates a risk of disappointment, of forcing the AUD back to the January low around 0.8510 before proceeding with the rally. A drop through 0.9270 at any time will confirm the AUD on a short-term path lower. By August such a decline should be complete and the AUD should resume its long-term uptrend. Another sharp rise will be possible with the challenge of 1.0000 being seen by January 2009.