RBNZ will steal the limelight but key technical target for AUDUSD
The AUDUSD has been on a run since the RBA kept rates unchanged and had comments that were less dovish. It is the RBNZs turn in the new trading day. Ryan had an excellent post about the key levels.
What about the AUDUSD? Where has the rally higher taken it?
Looking at the daily chart (see above), the high today ran into a key target area against swing lows from back in March and April and the 50% retracement of the move down (from the April high to the May low). That area comes in between 0.7477 to0.7489. The high price today? 0.7481.
So traders leaned against the level put a lid on it and we have seen a modest move lower (it really is modest)
Looking at the 5- minute chart below you can see more clearly what the daily chart does not show. Specifically, you can see the traders lining up on three separate tests of the high target area.. Is it bearish sign? Yes, but.....Traders leaning against the target area likely have their stops on a move above the 0.7489 area. Remember, sellers are trading against the recent move higher.
As a resuit, it is important to see the closest technical level taken out below. That will give the seller more confidence that the high is in.
WHat are the closest targets to get below and stay below?
Looking at the 5- minute chart below, the 100 and 200 bar MA are at 0.74577 and 0.74687 respectively. Getting below and staying below is a step. Also the 50% of today's range would be nice too (at 0.7455). That would take the pair negative on the day.
If there is a move below those level than the traders who are short, can use those MA as risk defining levels and the tide may start to change.
Right now, the shorts who leaned against the resistance above have a low risk trade, but there is work to be done.
