The AUDUSD has been trading in a volatile up and down action in trading today (see hourly chart below).
The pair is currently trading near the high for the day and this area is also a level to eye for sellers (and buyers as well). The 0.8103-08 has been an area where buyers used as a support floor at different points in December. The AUDUSD initially bottomed at the 0.81065 level on December 16th. On December 23rd, pair dipped below that level on a few occasions but then re-established the area as support on Dec 24 and 26th.
On Friday (January 2nd), support switched to resistance on a break below the 0.81000 level, and today that area was tested twice and so far held twice.
AUDUSD tests the old floor (now ceiling) in up and down trading.
Will the level cap the upside now?
That is what traders who are short will be watching now. If you are inclined to sell a rally, this would be an area to lean against to define and limit risk. Stay below, the bears remain in control. Move above, and traders might be more inclined to cover and reassess at the 200 and 100 hour MA levels (green and blue lines in the chart above).
Taking a longer view of the pair, it is still more bearish after breaking below trend line support on the weekly chart back in December. However, the lows from 2010 at 0.8066/0.8071/and 0.8081 will need to be broken and stayed below if the the trend lower is to continue. The low today moved below these levels for the first time, only to have the break fail.
So the market is testing the will of both the sellers and the buyers in trading today. The shorter term hourly chart is trying to hold the topside, but buyers have to be eyed against the 0.8066-81 area as well.
AUDUSD tested the lows from 2010 and rebounded. Key level on the downside to get below.
