The AUDUSD started the day near the 100 day MA (blue line in the chart above) and for the 9th out of 10 days, the price traded at the 100 or 200 day MA (or both). Today, the price traded above the 100 day MA but when trend line support was broken at the 1.0201, the selling intensified (see chart above).
The hourly chart also showed the downside vulnerabilty as the price fell below 100 hour MA (blue line), trend line and retracement support in the 1.0229, and 1.0199 areas respectively. When different time period charts are in agreement, traders have multiple reasons to act. In this case, each of the charts were showing a downside vulnerability.
The 5 minute intraday chart shows the extent of the trend move today. The price action at the tops also gave reasons to sell on the break of trend line support at the 1.0235 area (see triangle formation in the chart below). The trend move down has been fairly aggressive. with three separate legs. The last two, have corrected to the 38.2%, and each found sellers (see yellow areas in the chart below). This is indicative of sellers remaining in control.
The price is in the middle of a channel on the chart with topside resistance at the 1.0125 and the bottom trend line at 1.0091 currently. I would think that with the oversized range today(154 pips so far with an average of 100 pips over the last 20 days), that a move toward the lower extreme would find buyers, while a break above the topside trend line would find some more balance with buyers and sellers. On a move higher, I will be eyeing the 100 bar MA on the 5 minute chart for additional clues. If the price can move above this MA line (blue line in the chart below at 1.0137 currently), I will look for further upside corrective buying. If the price cannot move above this line, the sellers remain in firm control.
One thing to be aware of is the EURAUD. This pair has rebounded and is having it’s own trend move today. The price for the pair is now above the 100 hour MA (blue line) for the first times since June 26th at the 1.2027 level currently. Staying above, should help to keep the pressure on the AUDUSD. So keep an eye on this for clues as well. Next resistance comes in at 1.20806 and then the 200 hour MA at 1.2113 (and coming down). The price has not been above the 200 hour MA since June 5th when the price was up at 1.2775. This is indicative of the strong down trend in this pair.
