The AUDUSD has moved smartly higher today after sniffing the 200 day SMA yesterday and today (200 day MA at the 1.0403 level – low today 1.04216). The move higher has pushed the price above the downward sloping trendline on the hourly chart below (currently at the 1.0492 level).
In addition, the price has moved above the 100 hour MA and 38.2% retracement at the 1.0515 level today. The break of these two levels should have solicited additional buying interest and momentum, but so far, traders seem more content to sell on the break rather than buy. Nevertheless the price remains a key level that will eventually force a move lower or higher from here.
On a break higher, the next target would be the 50 % level at the 1.05447 level. Above that, the 200 hour MA (green line) at the 1.0561 level would a focus for traders. I would not expect a move above this moving average (on the first test at least).
On the downside, if the price cannot find the momentum above the 1.0515 level, a move back toward that broken trendline would be the target. If broken, it would disappoint the buyers, and should lead to a move toward the key 200 day MA at the 1.0403 .
The price has found a key level and seems to have put the buyers and sellers in balance. It is the imbalance in supply and demand that moves the market. The good news is risk is limited. Look for the momentum, then target where you are going.
