AUD/USD forecast for the week of December 17, 2012, Technical Analysis

The AUD/USD pair had a productive and positive week as we smashed into the 1.06 resistance area. This area is the top of a significant consolidation zone, and as a result we could measure a move up to 1.10 if we managed to break out. After all, this consolidation area has been between 1.02 and 1.06, measuring a total of 400 pips. A breakout above the 1.06 level should have us approaching the 1.10 level by the time the move is done. As for selling, we do have a shooting star on the daily chart, but we think we will more than likely just pullback to the 1.05 level and find support again if we do start a selloff. At this point time, we find it very difficult to sell on a longer-term trade simply because the 1.04 level looks so supportive now.