Yesterday support held
In a post yesterday, I looked at the AUDJPY and at the time, the pair was testing a key technical area defined by the 200 week MA and the 100 bar MA on the 4-hour chart.
At the time, I wrote:
"So the pair is down on the week and threatening to dip back below the key 200 week MA. However, it will need to get another push lower below that 100 bar MA on the 4-hour to turn the tide more bearish. That level is setting up as a tough nut to crack as buyers stalled the fall against the level on the first look." CLICK HERE for the post.
The 100 bar MA held yesterday and it held support today. The blue step line in the chart above currently at 0.8834, is the 100 bar MA on the 4-hour chart. Buyers leaned. The solid red line is where the 200 week MA is this week. Although the price dipped below it yesterday and today, it was the combination of the two MAs that made the area a key level
What now?
The price has corrected up to the 100 hour MA at 88.87. This level and the 200 hour MA at 89.066 (and the 38.2% retracement at 89.029) are levels that should stall a rally if the sellers are to look to take control from the buyers today.
The problem is the buyers against the 200 week MA and 100 bar MA on the 4-hour below may have different thoughts. They bought against key support and key support held.
So this area is a key area for buyers and sellers.
- If the 100 hour MA holds, sellers are taking back control.
- If the price moves above 100 hour MA the bias is more neutral.
- A move above the 200 hour MA, puts buyers more firmly in control.
Traders will lean at levels as risk is defined and limited. If you like the short side, this is an area to get involved. If you were the buyer yesterday and today, this is a potential profit taking target. But a break above tells you something too and that is the battle that is now being fought.
