Daily candlestick chart shown below, including after hours trading to the end of the week,which closed at 4263, compared to Friday's ASX close of 4206.
Sunday, 16 October 2011
The recent rally has felt impressive, but the chart shows that the market has been range bound since early August. If the market breaks upwards from its range, for the longer term bearish view to remain valid, any advance should go no further than the Head and Shoulders neckline.
The EUR/USD rallied strongly last week. So long as the market remains below the 40 week moving average I consider it to be trending down at this time frame. The nearby down trend line may act as resistance.
Trading since the September low appears to be a correction of the preceding decline. Certainly the market is range bound, and a break through one of the nearby trend lines is required to indicate likely future direction.
Trading since the September low appears to be correction of the preceding decline, implying that new lows lie ahead. The lows from May, June & July should act as overhead resistance going forward.