Investors continued to dump risky assets overnight, driving the June Australian Dollar futures contract through a slow-moving uptrending Gann angle from the .9496 main bottom at 1.0066.
Since topping out at 1.0422 on April 27, the contract has fallen sharply. The initial break was triggered by the surprise 50 basis point cut by the Reserve Bank of Australia, but the subsequent weakness has been fueled by European sovereign debt fears. Currently, the contract is walking down a steep downtrending Gann angle at 1.0102. This price is today’s resistance.
Based on the main range of .9496 to 1.0720, a major retracement zone has been formed at 1.0108 to .9964. At this time the market is trading on the weakside of the 50% percent level, but slightly above the Fibonacci level which is today’s likely downside target if the market continues to sell-off.
Cleary the main trend is down on the daily chart. If the daily June Australian Dollar continues to follow the downtrending Gann angle at a rate of .004 per day then look for a test of the slow-moving uptrending Gann angle at .9799 to .9801 on May 18 or May 21.
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