Support on AUD/USD still looks solid

Discussion in 'Technical Analysis' started by LearningMarkets, Aug 25, 2008.

  1. LearningMarkets

    LearningMarkets ET Sponsor

    Can you grade one level of support relative to another? Is a pause at a specific price point more important today than the same support level a month ago or 6 months ago? I think that there are ways to estimate one support level as more important than another. A good example is what is going on right now on the AUD/USD. Clearly we are at a long term support level having been here before in December and January during the last disruption in oil prices. However, what else is true is that we are at a level of extreme price movement based on a reading from the CCI or commodity channel index.

    I use technical indicators like the CCI to grade support and resistance levels. When support coincides with a historically low level on the CCI where the market has reversed significantly before, I take note. That is the situation now. Support in the price action on the AUD/USD is occurring at the same time that we are clearing an extreme reading on the CCI. I have found that this is a good indicator that a continued trend is at risk and a bounce may occur. Will this happen again now?

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