By: Colin Jessup
The AUD/USD hit a wall at 1.0380 today, the same zone that has stopped the bulls advance and held the Bears back on numerous occasions in 2011.
After having a mostly bullish week so far, today's action only closed 24 pips higher than open creating a spinning top candle formation. Price previously stopped at this zone on January 3rd, when it turned bearish and fell to the previous weekly zone of 1.0160 on January 09. Price has been dropping since the open of the Tokyo session and will possibly continue to do so as the AO indicator is showing more bearish strength than bullish.
Price will need to clear today's low at 1.0280 in order to be consider Bearish tomorrow, but it is more probably that we will pull back slightly and then push higher, possibly breaking the resistance zone at 1.0380. Resistance above this zone will be at 1.0480 and 1.0600 above.
If the Bears manage to take the reigns, look for support at 1.0250, 1.0160 and 1.003. this pair is quite Bullish, and I remain Bullish in my outlook with a strong possibility we will continue this trend next week.
Happy Trading