The AUDUSD pair experienced a notable uptrend in the early hours of the Asian-Pacific trading session today. During this period, the currency pair managed to break above a significant technical threshold, the 200-day moving average, positioned at 0.65773. This movement initially indicated a potential shift in market sentiment favoring the bulls.
However, the momentum proved to be short-lived. Following the initial breakthrough, the AUDUSD exhibited considerable volatility, alternating between rises above and falls below the 200-day moving average. This pattern of fluctuation reflects a lack of decisive momentum from both buyers and sellers, creating an environment of uncertainty in the market.
The most recent development in the trading session saw the AUDUSD taking a downturn, moving below the 200-day moving average once again. This shift in direction, particularly in the last hour of trading, suggests a tilt towards a bearish bias. The market’s attention is now turning to the 38.2% Fibonacci retracement level of the upward move from the November 10 low, which is located at 0.65552. A consistent movement and closure below this retracement level could further affirm the bearish sentiment.
It is essential, however, to approach this analysis with caution. A similar bearish push occurred yesterday, where sellers managed to drive the price below the 38.2% retracement level. Despite this, they were unable to maintain the downward momentum, leading to a significant price spike above this level in the early trading hours of today. This recent history of the pair’s trading behavior serves as a reminder of the market’s current volatility and the potential for rapid and unpredictable changes in direction.
Yesterday, the Reserve Bank of Australia Rates unchanged and it was perceived to be more dovish. That sent the AUDUSD to the downside and below the 200-day moving average. Is that trend from yesterday reestablishing itself after correcting higher today? We will see.
This article was written by Greg Michalowski at www.forexlive.com. Source