Forex Technical Update
AUD/USD 4H Chart 11/28/2012 3:50PM EST
New Highs: The AUD/USD has been rallying since bouncing off the 1.03 handle on Nov. 16. After clearing above a key resistance area around 1.04-1.0420, it broke to new highs for November. The RSI popped up above 60 and touched 70 signaling nascent bullish momentum after a period of sideways momentum in November. During the 11/28 session, the AUD/USD fell from 1.0490 back to 1.0425, near the previous resistance area before bouncing up sharply back toward the 1.0490 high.
Targets: If these initial bullish continuation signs are followed with further rally, the next key resistance/target will be the 1.06-1.0620 area, which is the resistance and highs for October and September. Note that if the RSI gets pushed to 70, it will reflect bullish continuation momentum, something we haven’t seen in the 4H chart since the rally in June that started from 0.9590, which eventually reached 1.06.
Failure: The failure to clear above 1.05 psychological handle, and fall back below 1.04 would be a sign that the market is still consolidating sideways, but expanding higher highs and perhaps a lower low. Downside below 1.04 would be a pivot at 1.0335, the 1.03 handle. Below that, further bearish development can open up the 1.0150-1.0180 October lows.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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