The AUDUSD buyers took a shot to the upside earlier today, and in the process extended above a swing area high near 0.65228. The price also moved above and away from its 38.2% retracement of 0.65086. The high price reached 0.6542, but rotated back to the downside. The shot was taken and missed.
The subsequent move to the downside looked back toward the 100-day moving average at 0.64904, and the low of the swing area at 0.6500. The buyers against support have been able to stall the fall so far.
When the market trends down like it did from the July high to the October low and then corrects higher, I like to see the 38.2% retracement of that trend move be broken and stay broken. Last week the price extended above that 38.2% retracement and failed. Today, the price extended above the 38.2% retracement with momentum and failed.
So watch the 0.65086 level (38.2% retracement) for short-term bias defining level. If the price can get above that level and then the high of the swing area at 0.65228 again, I would expect further upside momentum.
Conversely, if the price stays below the level and extends below the 100-day moving average of 0.64904, we could see further downside probing after the sharp move higher yesterday. Support comes near 0.6450.
This article was written by Greg Michalowski at www.forexlive.com. Source