Corrects to 50% of the last leg higher.
The AUDUSD was the subject of my last video last week "Non-trend transitions to trend'. You can view (or re-view/review) the video here:
In my follow up post from Friday, after the pair showed stall near 0.7755 to 0.7759 swing area, I spoke to support at 0.7700. In the post "AUDUSD catches it's breathe after run higher" I commented:
The best case for the buyers would be for the price to holds near the 61.8%, base and run above the higher ceiling. If there is more downside, I would expect dip buyers near 0.7700 IF the buying and break seen this week is a "real" change in bias for the pair.
The price did dip but found support buyers at 077056 yesterday on the Monday corrective dip. Buyers leaned and kept the break and the bullish bias "real" (see chart below).
The price rise continued today with the pair reaching a high of 0.78152. That was near a swing area near the extreme from March 18 between 0.78139 and 0.7818. The high from March reached 0.7848.
The correction off the high saw the pair correct to the 50% of the last leg higher (from the Friday low) at 0.77604 (the low reached 0.7760). The price bounced and trades at 0.7774 currently.
What now?
The high today took the price up around 192 pips from the break above the 100/200 hour MAs last Tuesday (non trend transitions to trend). The price decline was somewhat swift today, but holding the 50% of the last leg higher give the longs some confidence, and keeps them more in control. It would take a move back below that 50% level, to hurt the bulls. A further move back below the 100 hour MA (blue line) at 0.7748 currently, would put more of a dagger in the heart of the buyers.
On the topside, getting back above the 0.7800 level would give buyers even more confidence and hurt the sellers. From there, the swing area up to 0.7818, and then the March 18 high at 0.7848, would be targeted.
PS the high for the year comes in at 0.8006 reached on February 25 (see chart below).
