AUD/USD (daily chart) as of March 12, 2013 has continued its rise from major support within the wide, 8-month trading range. This climb began on a key hammer candle last week that indicated yet another upside turn from strong support around 1.0150. Since July 2012, the clear horizontal trading range has confined price between this 1.0150 downside support and 1.0600 upside resistance. The pair has rebounded between these levels at least four times for each level within the past 8 months.
Last week was no different. Advancing from the well-formed hammer candle at 1.0150 support, price has now approached intermediate resistance around 1.0350. This level not only represents a prior support/resistance pivot zone, but the 200-period simple moving average is also currently right around this price area. In the event of a breakout above this resistance confluence, price could make a medium-term move back to the upside towards the top border of the trading range around 1.0600.
James Chen, CMT
Chief Technical Strategist
City Index Group
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