AUD/USD (daily chart) has advanced to approach important resistance around the 1.0600 price region. This level has served as a key resistance area two times this year thus far – the first time in August and the second time a shooting star candle re-test in mid-September – but has also served as a pivotal support/resistance level prior to 2012. The third bullish approach of the 1.0600 level has just occurred during a strong short-term uptrend extending back to the October re-test of 1.0150 support, but the uptrend extends even further back to the June 0.9581 low. With short-term and longer-term trends both bullish, 1.0600 can be considered a key level to watch. In the event that price is able to break out strongly above this level, important potential resistance levels to the upside reside around 1.0750 and then 1.0850. If, however, AUD/USD is unable to breach the key 1.0600 level significantly in the near-term, price could continue the range trading between 1.0150 and 1.0600 that has characterized the pair for the past five months.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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