Dec. 18 (Bloomberg) -- The Australian dollar may extend its gain this year against the U.S. currency toward a 16-month high, according to Gaitame.com Research Institute Ltd., which cited trading patterns.
The so-called Aussie may rise to $1.10 should it break above $1.06, a key resistance area, according to Takuya Kawabata, a researcher in Tokyo at Gaitame.com. The higher level was last reached in August 2011.
“The Australian dollar has been supported above the convergence line on the daily Ichimoku chart since late November and is looking to test higher,” said Gaitame’s Kawabata. The Aussie last rose above $1.06 on Aug. 9, forming a long upper shadow, he said, referring to a formation on the candle chart which displays a currency’s high, low, open and close for each day.
The Australian dollar was at $1.0539 as of 4:27 p.m. in Sydney from $1.0552 yesterday. It touched $1.0586 on Dec. 12, the highest since Sept. 14. The Aussie has gained 3.2 percent this year.
Ichimoku charts are used to predict a currency’s direction by analyzing the midpoints of historical highs and lows. Resistance refers to an area on the chart where analysts anticipate orders to sell an asset may be clustered, whereas support refers to an area where there may be a concentration of buy orders.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
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