The AUDUSD moved higher yesterday, and in the process tested a downward-sloping trendline on the hourly chart connecting the high from October 11 and the high from October 25 (see red numbered circle 3 on the chart below). The price high also got close to the 50% midpoint of the October trading range near 0.6385. The inability to move above that trendline and 50% retracement gave the sellers the opportunity to lean. The price moved lower.
In the Asian session today, the price also got a push lower after weaker China data. That dynamic pushed the price toward its 100-hour moving average (blue line in the chart below). Support buyers came in and pushed the price back to the upside reaching a high near 0.63736 before rotating back lower in the New York session on strong US dollar buying.
The employment cost Index was a little higher, but perhaps the dollar buying has more to do with skittishness ahead of the FOMC rate decision tomorrow at 2 PM ET (although rates are mixed today).
The subsequent push to the downside has now taken the price below its 100/200-hour moving averages and is testing the low of a swing area near 0.6327. Break below that level is a door for more downside potential toward 0.6300 and another swing area between 0.6284 – 88.
Conversely, move back above the 100-hour moving average and there could be some disappointment on the break back to the downside.
This article was written by Greg Michalowski at www.forexlive.com. Source