The dollar’s bounce was short-lived and even the equities rally that begun late last night (EST) on President Obama’s announcement that Bin Laden had been killed has begun to transition back into the market psychology that preceded the announcement. From strictly a trading point of view, the news is not a game-changer and the fade makes perfect sense.
The trends in place, namely the
1) downtrend in the U.S. Dollar
2) uptrend in the Dow
3) uptrend in crude oil
…have not changed. In fact the correction was weak at best.
The strength in crude oil and weakness in the dollar are creating exactly the environment that aussie bulls need to pressure 1.1000.
The 240-minute AUD/USD has a Channel Up chart pattern that can be traded off uptrend line support (swing buy) or through the uptrend line resistance (breakout buy). Chart pattern alert provided by Autochartist.
Notice that there are two chart patterns on the the 240-minute AUD/USD. The first (left side in blue) was the initial momentum breakout buy from the congestion of the Ascending Triangle formation. The subsequent rally has formed a Channel Up and this is a valid pattern because of the fact that it has formed within the context of an uptrend.
Ideally, I’d like to wait and see if 1.1000 can temporarily exhaust the rally and send prices to the 20 period SMA for an aggro swing buy and perhaps even lower to the uptrend line support of the Channel Up and the 34 period EMA high that is overlapping the pattern’s support.