Forex: AUD/USD attempting to penetrate 1.03/1.0340 supply area (Barcelona) - The AUD/USD continues to build on recent gains, and after a shallow retracement off 1.0310 supply area in the last Asian session, strong demand since early Europe snapped the pair back up through contention area 1.03 again, eating up supply and now consolidating gains circa 1.0316 following a weekly peak of 1.0333.

Going forward, the break and hold above 1.03 represents a significant milestone for the combatant bulls, as it confirms the break of a lower low and lower high structure present since the sharp fall off 1.0550 on Jan 22. The upside resolution, while encouraging a shift to more buy on dips strategies, still sees a strong area of supply between 1.0350-1.0370, as per Feb 20 price action.

According to Greg McKenna, CEO at Global FX: "Looking at our usual indicators, the chances of a move toward 1.04 are now high." Short term, the analyst notes the 1.0335 high overnight as key short term resistance, saying that "the overbought nature of the 1 and 4 hour charts needs to be washed out of the market if this is to be breached." Greg adds that a decline through 1.0307 "may open up some shorter term weakness on the hourly charts." From a lower timeframe perspective, the area 1.0265-1.0280 may offer significant demand as per the impulsive reaction off it in the last European session.

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