Back to Technical (2010-02-24 AUD/GBP analysis)

After Bernanke mentioned that the interest rate would not be increased in near future, market in US did not fall just like what HK did last Friday. So on Monday, HSI recovered what it dropped in previous trading day. However, according to my analysis in last blog, DJI is very unlikely to break through the red line which is a big resistant, and HSI would be following the drop of DJI. Today, HSI tumbled and let's see whether DJI would further topple later.

Other the other hand, as EU has asked Greece to submit a concrete budget-deficit-reduction plan within a month, probably there won't be any breaking news that send EURO fluctuating in near days. So let's change focus to another currency: AUD and GBP.

Getting back to Technical Analysis. We can see that AUD has just touched the upper line and is heading back downwards along the channel. The fibonacci line might give a little support but referring to the past two times, it looks like the horizontal line had quite little power.



More than the channel, another instrument gives us a very strong signal to short AUD. It is the slow stochastic. We can see that both K-line and D-line are roughly about 80. The most important thing is: the K-line has dropped through D-line in the area of above-80. This tells us that AUD is going down!



Other than AUD, let's see GBP. Though the signal is not as strong as AUD, looking at the down-trend channel, I predict that GBP will surge. So, for agressive investors, why not short AUD/GBP?