Forex: AUD/USD: path of least resistance appears to lie North (San Francisco) - Wednesday’s trade saw AUD/USD regain losses made in the previous day, bouncing from the 1.0430 support area (9-day EMA) to close at 1.0475, a 2-month high.

“Given the potential volatility in sentiment about the fiscal cliff trade in the AUD is likely to be fraught as well but ultimately we'd have to expect a positive outcome so a higher AUD into year-end would be a reasonable expectation,” comments Greg McKenna, Chief Executive at GlobalFX.

Valeria Bednarik, Chief Analyst at notes that AUD/USD holds a “limited bullish tone,” and that a push higher is needed to confirm more gains. “I would expect stops to stand in the 1.0500/10 area, so bullish momentum will likely appear only if those get triggered today,” she says.

Should AUD/USD extend the rally today, a break above the 1.0490 resistance is needed to test offers at 1.0515 (Sep 21 high), then 1.0545 (Aug 23 high) and 1.0595 (Feb 23 low). Ms. Bednarik identifies support levels at 1.0430, 1.0410 and 1.0370.