The AUDUSD moved higher yesterday, pushing back above its 100- and 200-hour moving averages, which had been tightly converged—a signal that momentum was trying to shift back in favor of the buyers. However, the rally ran into a familiar ceiling, with sellers stepping in near 0.6938, the low end of a broader swing area that extends up to 0.6962. That rejection led to a corrective move lower, but importantly, the downside stalled near the 100-hour moving average, keeping the bullish bias intact—at least initially.
In today’s Asian-Pacific session, the price did dip below the 100-hour moving average, but the break lacked follow-through. Buyers quickly leaned against the 200-hour moving average near 0.6896, once again using that level as a risk-defining floor. Since then, the pair has rebounded, moved back above the 100-hour moving average (currently at 0.69097), and built a base against that level before pushing higher into the European and early North American sessions.
The rally, however, has once again stalled—this time against a downward sloping trendline on the hourly chart, currently near 0.6946 and drifting lower. That sets up a well-defined technical battleground. On the topside, the falling trendline caps gains and defines resistance. On the downside, the 100- and 200-hour moving averages at 0.69097 and 0.6896 respectively define support. In other words, buyers and sellers have clearly drawn their lines in the sand, and the next directional move will likely come from a break outside this range.
If buyers can push above the trendline resistance, the next upside targets come into focus quickly. First is the swing area high at 0.6962, followed closely by the 38.2% retracement of the March trading range at 0.69681. A break above that zone would strengthen the bullish case and signal that buyers are regaining more meaningful control.
On the flip side, a move back below the 100- and 200-hour moving averages would tilt the bias back to the downside. In that scenario, traders would look toward a series of swing lows from last week at 0.6875, 0.6859, and 0.68328. Notably, the 100-day moving average near 0.6837 sits within that lower zone, increasing its importance as a potential downside target (be aware).
For now, the market is in a defined consolidation, with clear risk and bias levels on both sides. Break the trendline, buyers gain control. Break below the moving averages, sellers take over. The setup is clean—the market just needs a catalyst to tip the balance.
This article was written by Greg Michalowski at investinglive.com.
