The AUDUSD fell to the 200 hour MA on the first reaction after the employment report, but found buyers waiting there. Note the level is also the 50% retracement of the move down from December 31 high to the January 7 low (see hourly chart below).
AUDUSD bounced off the 200 hour MA after the US employment report.
Holding the level gave traders a technical reason to buy. Rotation into risk and carry trade is also benefit for the pair.
Looking at the monthly chart, the pair made new lows going back to July 2009 when it fell below the 2010 low at the 0.8066 level. However, that break could not be sustained and we are starting to see traders think in terms of a corrective move for the pair.
AUDUSD fell below the 0.8066 lows from 2010, but that break could not be sustained.
The daily chart shows the moves below the 0.8066 level. Although there were two moves that took the price below this level this week, each failed to record a close below the key level. Moreover, the most recent low on Wednesday, took out Monday’s low by 2 pips and that’s it. If a new low is made, traders expect additional momentum. That was not seen. Yesterday, the low for the day came in at the 0.8069 level – just above that 0.8066 low from 2009. The bias had turned.
There is room to roam higher and still keep the overall trend in place. However, the holding of the 200 hour MA and the prior failures on the breaks lower makes me more bullish for the pair. The 0.8214 and 0.8278 are the next target areas (see chart below). The price should not move below the earlier Asian session high for the day at 0.8146. Another risk defining level would be the 200 hour MA. The holding of that level after the report, has solidified that MA as a key support level now.
There is room to roam on a correction in the AUDUSD
