7 -weeks of chop
The AUDUSD today moved toward the low of a "value area" where most of the trading has taken place in the pair over last 7-weeks of trading (see red box on the 4-hour chart below). That "value area" comes in between 0.7343 and 0.7443 - so about 100 pips.
The market has traded above that area. It has traded below that area. However, those breaks failed before long (see red shaded areas), and the price returned into the red box. This week, the pair stayed within the red box range for the entire week.
The midpoint of the 7 week trading range (from the swing low, to the high) comes in at 0.7396. That is also where the 100 and 200 bar MAs on the 4-hour chart come in. We moved above that area in trading today. So the buyers from the lower extreme are more in control as long as the price stays above the level (risk for longs).
At some point, the ups and downs will cease, and the price will trend more to the upside or the downside - outside of the value area. Be on the lookout for that going forward.
In the meantime, traders can use the "red box" extremes or the 50%/MA area as risk defining levels.
Drilling to the hourly chart below, the 100 and 200 hour MA on it are also being broken (at 0.7398-0.7402). That too is tilting the pair more to the upside at the moment. With the 0.7396 a key area on the 4-hour, the area up to 0.7405 increases the area importance in defining a bullish or bearish bias (Stay above more bullish. Move below and the bias can turn a little more bearish on the failed break)
