Yesterday the AUDUSD was under pressure and a poor performer among the major currencies. Today, the pair has done an about face, and has retraced the move lower. It is also the worst performing currency today. GDP came in better and Governor Stevens reluctance to add any more to his view that the AUD is too high, ironically sent the AUD higher (or so goes the story). He should have said something…

AUDUSD hourly chart. Reversal day puts the buyers back in control.

AUDUSD hourly chart. Reversal day puts the buyers back in control.

Looking at the hourly chart the move lower yesterday did some technical damage. The price moved away from the 100 day MA (Blue horizontal line overlayed at 0.9337 level today), 200 hour MA, and below channel trend line. That was yesterday….

The slightly better GDP data today initially found resistance sellers against the bottom of the broken channel trend line. However,when that line was broken (see BREAK in chart above), the buyers emerged and the sellers covered. Stevens did not help the sellers, and the pair was off to the races – completing the reversal of yesterday’s move lower in the process.

The high today, has found some resistance sellers against the underside of another broken trend line (this one coming from the lows on August 21), and the price is currently trading above and below the 100 day MA at the 0.9337. I would look for patient buyers to take a stab against the 200 hour (green line in the chart above), 100 hour MA (blue line) and broken trend line today. That “cluster” of support comes in at the 0.9320-24 area currently. Anything else, is probably forcing a trade.

For those long, the support level at the “cluster” below is your risk. With three tech levels converged at an area, it just makes sense to stay above it. If we are to go higher, however, we will need to see a break above the high for the week at the 0.9352 and the underside of the broken trend line (see chart above). They both come in around the same level.