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AUD/USD Key Reversal Week Bearing Fruit

Currencies / Forex Trading Nov 30, 2009 - 03:53 AM GMT

By: Seven_Days_Ahead

Currencies

Best Financial Markets Analysis ArticleIn the FX Specialist Guide we had pointed out a Key Reversal Week that potentially boded bad for bulls. We still believe this to be the case and signs begin to emerge on the Daily chart that back this up.


The FX Specialists view


 WEEKLY CHART:

Key Reversal Weeks tend to be more reliable than key reversal days, and we saw one of the former recently in AUD.

The current risk is to the downside.

On this chart note the first interesting support/target is around 0.8600, the 23.6% retracement

DAILY CHART:

We have now seen a failure of the shorter term bull channel support today.

The confirming signal would be a close below the 0.8905 02-Nov low.

In the Guide we had already noted a negative RSI divergence that was heralding bull fatigue.

Note lower support coming from the slightly longer term bull channel base at 0.8760 currently, ahead of that 0.8600 23.6% pullback level.

In the Guide we had suggested sales, on the back of that Key Reversal Week, into 0.9300/20. Those now short will now favour lowering stops to 0.9325, targeting 0.8925 for partial profits. Balances may seek to close nearer to 0.8600 – we’ll review this in due course.

 

Note: A recent Key Reversal Week seen in EUR/USD was not considered a strong example of one – and this week it was negated. However, there has been fresh failure close to a long term 76.4% level, and a close below the 1.4800 level today would produce a fresh, perhaps more reliable, key reversal week. We’ll see.

Mark Sturdy
John Lewis

Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

© 2009 Copyright Seven Days Ahead - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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