On the daily chart below for AUDUSD, we can see that the price recently sold off again from the top of the range and the 38.2% Fibonacci retracement level. We’ve been stuck in this range since the collapse of the Silicon Valley Bank as the market is still uncertain if the events will help the Fed to bring inflation down fast to target without a major hit to the economy, or if we will have a worse hard landing than expected.
The sellers, nevertheless, keep leaning on the resistance and they’ve been quite successful for now. Needless to say, that an eventual breakout on either side of the range should lead to big moves and traders should be prepared for that.
On the 4 hour chart below, we can see that the trendline that was supporting the rally towards the resistance got broken last Thursday and the sellers immediately piled in to extend the selloff targeting the support at 0.6563. Yesterday, the price bounced, and we got a pullback to the red long period moving average that is now acting as resistance for the bearish short term trend. Such pullbacks are generally healthy in a trend, especially after such quick moves.
On the 1 hour chart below, we can see that the price pulled back all the way up to the swing high level where we have also confluence with the 38.2% Fibonacci retracement level. Since tapping into that resistance zone, the price fell again and it’s now pulling back to the blue short period moving average. The market is likely to find sellers here as the moving average crossover will be taken as a hint that the bigger pullback has ended. Today, we have the US Retail Sales report and it’s expected to be a market moving event. Worse than expected data is likely to be taken as bad for risk sentiment, ultimately favouring the USD, while better than expected figures may weaken the USD again.
