MARCH 7, 2013 TECHNICAL ANALYSIS.
The Aussie dollar has been trading in an ascending channel against the loonie over the past four weeks, which has now brought the price level towards the key level of 1.6 which was touched in yesterday’s trading. Subsequently we have come to a crossroads whereby a pushy back towards the downside is likely, despite the potential of a push towards 1.075 driven by negative Canadian data.
The pair have exhibited consistent swings since March 2011 between the two boundaries of 1 – 1.6, with the only exception being a double top to 1.075 in January 2012. Subsequently we know there is a significant area of resistance to be found at these levels which will largely require a substantial shift in emphasis to reject.
This channel in particular can be seen very clearly, including a distinct respect of the halfway marker, derived from the blue linear regression channel. This also coincides with the 61.8 Fibonacci retracement of the August to October 2012 swing. Subsequently, should we see this reversal to the downside, the level of 1.034 is highly likely to provide support, in much the same way as it has done in late 2012.
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