AUDUSD: Monitor the recent tiny horizontal range

Monday, October 14, 20130 comments

AUD/USD is moving within a tiny horizontal range between the support at 0.9388 and the resistance at 0.9485 (11 October 2013 high). The recent succession of higher lows favors a bullish bias. Another resistance is at 0.9529.

We favor a new phase of strength as the consolidation since June is supportive of a longer phase of AUD strength. A break of the support at 0.9224 would invalidate that scenario.

In the medium-term, the break above the strong resistance at 0.9345 confirms an improving medium-term technical structure. However, the long-term technical pattern remains negative thus far. Therefore, we expect the strong resistance at 0.9843 (21 May 2013 high, see also the 200 day moving average) to cap the medium-term upside potential.
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