The Australian dollar may advance to an almost 11-month high after yesterday’s “impulsive rally,” JPMorgan Chase & Co. said, citing trading patterns.
The so-called Aussie climbed 0.8 percent yesterday, capping five days of gains and reaching $1.0599, its strongest level since Sept. 14. The currency will face resistance in the $1.06 to $1.0625 zone, Niall O’Connor, a New York-based technical analyst at JPMorgan, wrote in a note emailed to clients today.
“A break of this area is necessary to reassert the upside bias,” he wrote. “With yesterday’s impulsive rally, the short- term upside risks have improved while presenting an important test at the range highs.”
Australia’s currency traded at $1.0590 as of 10:31 a.m. in Sydney from $1.0598 in New York yesterday. JPMorgan predicts that an advance above the area of resistance will spur gains toward $1.07 and then to the February high, which is $1.0856 according to data compiled by Bloomberg.
The Aussie will find buying support on declines toward $1.0495, O’Connor said.
Resistance levels are areas on a chart where orders to sell a currency may be clustered, while support refers to an area where analysts expect buy orders may be grouped. In technical analysis, investors and analysts study charts of trading patterns to forecast price changes in a security, commodity, currency or index.
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