Forex Technical Update
After failure to extend the immediate bearish reaction in the Aussie after the RBA meeting 12/6, the AUD/USD built strength from a recent range support. It has since been attacking the range resistance area seen in the 1H chart, but falling back twice back toward the middle of the range just above 1.0230. The resistance area at 1.03 is broken, but the upper bound of the resistance zone rests near 1.0330. A break above this is indicative of bullish continuation, since the market was already bullish entering into the mentioned range. This is confirmed by the RSI if the 1H reading can first push above 70.
The 4h Chart shows that the 1.0330 area is reinforced by the 61.8% retracement (1.0335) so a break above is significant. This also confirms the crossover above the 200 period simple moving average. Maybe we can give it some elbow space and make sure it pushes past 1.0350 before confirming the breakout. Meanwhile, the RSI reading is possibly going to push back above 60 toward 70, indicating bullish continuation momentum. A breakout target is near 1.0505 using the width of the breakout projected into the direction of the breakout. The 1.05 area is a pivot seen in October, we also have the 1.0519 level as 78.6% retracement. Expect possible resistance here.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources