AUD/USD (daily chart) as of March 5, 2013 has rebounded from key support around 1.0150. This price region is around the bottom of a clear trading range that has been in play for the pair since July. During the 8 months that this trading range has been in place, price has rebounded regularly between major support around 1.0150 and major resistance around 1.0600.
Having fallen slightly below 1.0150 yesterday, the pair formed a daily hammer candle that indicated a potential upside turn from strong support. Today, price has thus far followed through on that turn indicator. In the event of further upside momentum on this turn, price could rise within the trading range towards intermediate resistance around the 1.0400 price region, with potential for further upside towards the upper border of the range around 1.0600 resistance. To the downside, if price is able to break down and close below the range’s 1.0150 support, the clear short-term target would reside around parity.
James Chen, CMT
Chief Technical Strategist
City Index Group
Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.Get the 5 most predictable currency pairs