Weekly   

• Last Candlesticks pattern: N/A
• Time of formation: N/A
• Trend bias: Up

Daily    

• Last Candlesticks pattern: N/A
• Time of formation: N/A
• Trend bias: Up

AUD/USD – 1.0606 

We recommended to buy aussie at 1.0200 in our previous update on 11 Jan 2012, however, the currency pair only retreated to 1.0233 before finding renewed buying interest and has rallied from there throughout the rest of January, price surged to as high as 1.0688 last week. As price is still trading well above both rising Tenkan-Sen and Kijun-Sen, suggesting bullishness remains for a test of previous resistance area at 1.0753-65, however, a daily close above there is needed to retain bullishness and signal the correction from major high of 1.1081 has ended, then further gain to 1.0850 and possibly 1.0900 would follow, otherwise, further choppy trading within 0.9388-1.0758 range would continue.

On the downside, whilst pullback to the Tenkan-Sen (now at 1.0529) is likely, reckon previous resistance at 1.0387 would limit downside and bring another rise later. Only a daily close below the Kijun-Sen (now at 1.0366) would suggest top is possibly formed and bring test of the Ichimoku cloud top (now at 1.0208) and possibly to support at 1.0145 but price should stay well above the Ichimoku cloud bottom (now at 1.0031), bring another rally later.

Recommendation: Buy at 1.0500 for 1.0700 with stop below 1.0400.

On the weekly chart, the Australian dollar continued to move higher last month and three consecutive white candlesticks were formed, suggesting a test of previous resistance at 1.0753-65 would be seen, however, a weekly close above there is needed to retain bullishness and signal the correction from major high of 1.1081 has ended at 0.9388 earlier and bring further gain to 1.0900. Looking ahead, it is necessary to see a breach of said resistance at 1.1081 would confirm major uptrend has resumed and extend further gain to 1.1190-00 later this month or in late Q1.

On the downside, expect pullback to be limited to this week’s low of 1.0526 and bring such a rise to aforesaid upside targets. Only below previous resistance at 1.0387 would defer and risk test of the Tenkan-Sen (now at 1.0274) and possibly to previous support at 1.0145 but the Kijun-Sen (now at 1.0077) should limit downside and price should stay above the Ichimoku cloud bottom (now at 0.9926), bring another rise later.