AUDUSD is breaking out today after weeks of consolidating below 0.6880.
A daily close above that level today will offer traders an opportunity to watch for fresh longs, given the uptrend since mid-October.
However, you’ll want to mark an upcoming AUDUSD resistance level on your chart.
It isn’t easy to spot, but the monthly time frame shows why the 0.7030 area is one to watch.
Notice how the Australian dollar has treated 0.7030 as a pivot since 2015.
So although AUDUSD may break above the 0.7030 region in the coming weeks, we’ll likely see sellers defend it first.
Keep in mind that resistance is less than 100 pips from the current AUDUSD price.
That means longs will likely need to wait for a retracement to secure a favorable risk-to-reward ratio, perhaps into the 0.6900 area.
I’m short-term bullish on AUDUSD while above 0.6880 on a daily closing basis, but only as far as 0.7030.
I’ll reassess things if we see 0.7030 in the coming days.