Aussie Dollar at important juncture

The Australian dollar sits at an important juncture at the beginning of June 2014. The important levels to watch for the next major move are clear. A flat bottomed descending triangle has been forming since early April giving traders a delicious opportunity from a technical analysis purists point of view. More often than not a descending triangle breaks the lower boundary and then proceeds in that same direction for at least the same width as the triangle itself - in this case close enough to 2.6 cents from what the breakout would be.

The breakout point is somewhere between .9199 and .9205. A clear break and close below this level is needed. Sometimes a market will break a level but not close below it casting doubt on the move.

There is also the possibility the Aussie breaks the upper descending line and continues up for the same distance. The breakout point depends on timing and where the line is as it continues to descend.

Either way this is one to be patient on and wait for the market to show you. If you can't wait then options could be the way to go - buying a put and a call just outside the current range.

Notice the current resistance occurred at a previous support level formed by a nicely symmetrical head and shoulders pattern in the September to November period in 2013. The downside count for this was fulfilled nicely at the .8770 level.