AUDUSD bounces off moving average support in what has been a volatile up-and-down session

The AUDUSD AUD/USD The AUD/USD is the currency pair encompassing the Australian dollar of the Commonwealth of Australia (symbol $, code AUD), and the dollar of the United States of America (symbol $, code USD). The pair’s rate indicates how many US dollars are needed in order to purchase one Australian dollar. For example, when the AUD/USD is trading at 0.7500, it means 1 Australian dollar is equivalent to 0.75 US dollars. The Australian dollar (AUD) is the world’s fifth most traded currency, whilst the US Dollar The AUD/USD is the currency pair encompassing the Australian dollar of the Commonwealth of Australia (symbol $, code AUD), and the dollar of the United States of America (symbol $, code USD). The pair’s rate indicates how many US dollars are needed in order to purchase one Australian dollar. For example, when the AUD/USD is trading at 0.7500, it means 1 Australian dollar is equivalent to 0.75 US dollars. The Australian dollar (AUD) is the world’s fifth most traded currency, whilst the US Dollar Read this Term experienced significant volatility Volatility In terms of trading, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a means of describing an instrument’s fluctuation. For example, a highly volatile stock equates to large fluctuations in price, whereas a low volatile stock equates to tepid fluctuations in price. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, In terms of trading, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a means of describing an instrument’s fluctuation. For example, a highly volatile stock equates to large fluctuations in price, whereas a low volatile stock equates to tepid fluctuations in price. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, Read this Term during today's trading session. Settling at 0.6672 yesterday, the price swiftly declined in the early Asian-Pacific session, reaching a low of 0.66399. This movement took the price below the converging 100 and 200 moving averages, but the momentum quickly shifted, resulting in a sharp upward surge.

The subsequent high price fell just short of the 0.6700 level and yesterday's high at 0.67028. However, the price retraced and moved back below the swing area between 0.6676 and 0.6681 (see red numbered circles on the chart above). It found support at the 100-hour moving average (represented by the blue line in the chart) and is currently trading between that level at 0.6654 and the upper swing area at 0.6667, just below the closing level of 0.6672.

Although traders experienced turbulence throughout the session, the price action has now settled. Nevertheless, a break below the 100-hour moving average would likely prompt traders to target the 200-hour moving average at 0.66438, followed by the day's low at 0.66399. Further downside targets would be in the range of 0.6618 to 0.6625.

On the other hand, if the price manages to move above 0.6681 with momentum, it could signal a shift in focus towards the 50% midpoint of the downward move from the April high to low, which comes in at 0.6689. Subsequently, the levels around 0.6700/0.6702 and Tuesday's high at 0.67164 would be targeted. The 200-day moving average resides at 0.67308.

In recent developments, the Reserve Bank of Australia surprised the market by raising rates by 25 basis points to 3.85% this week. This announcement propelled the pair to its weekly high of 0.6716 and also tested the 61.8% retracement level on Tuesday. Market expectations had anticipated no change in policy.

Furthermore, the headline CPI year-on-year remains elevated at 6.3%, and earlier this week, retail sales exhibited stronger growth, increasing by 0.4% compared to the expected 0.2%. In parallel, the US Federal Reserve also raised rates by 25 basis points during the same week.