AUD/USD is Breaking Above July’s Declining Trendline

Forex Technical Update

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AUD/USD 4H Chart 7/16/2012 3:00PM EDT

3:00PM EDT 7/16: Trading up at 1.0250, AUD/USD is breaking above a declining trendline that connects the 1.0327 high on July 5 with the 1.0279 high on July 11. Although the market broke below a rising trendline support from June, it has failed to show bearish development and is therefore still sideways to bullish in the short-term. The bullish outlook for now is limited to the 1.0327 high.

Above 1.0327, we might introduce some further bullish outlook in the short-term, but we have to consider this in the context of a medium term sideways market seen in the daily chart.

The daily chart shows an AUD/USD pair without clear signs of direction. The 200-day SMA for example is more or less flat. In this type of dynamic, it can only be said that there is a gravity back toward the 200-SMA as price gets further away from it. In this case, if the market gets up to 1.0750-1.0850 area, we can look for some significant resistance and throwback toward the "mean" price action around 1.03.

AUD/USD Daily Chart 7/16/2012 3:05PM EDT

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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