Looks like the failed EURUSD break
The AUDUSD rallied sharply on the back of the RBA decision to keep rates unchanged. The rally took the price above trend line resistance, fibo retracements and even the 100 bar MA on the 4-hour chart at the 0.7700 level (the high extended to 0.7710 - see road map outlined before the RBA decision). That last push above the 100 bar MA failed (blue line in chart below), and the price rotated lower.
Now, with the USD rally - and the thought that the RBA might not have eased today but may be more inclined to do it next meeting - we are seeing a more meaningful correction.
Looking at the hourly chart below, the pair has the look similar to the EURUSD 4-hour chart, The price today moved above trend line and the 200 hour MA (green line). The move above the 200 hour MA failed, however. As a result, there has been a sell off over the last few hours of trading and the technical bias has switched around to more bearish.
Can the price now stay below the 200 hour MA and keep the bearish bias? That will be the risk defining levels for sellers going forward.
Despite the turnaround, the downside has it's share of land mines with the trend line (at 0.7636) to get and stay below, along with the 100 hour MA at the 0.76133 to break. That MA was broken yesterday before the rate decision but failed on the no change decision. The failure should give traders a cause for pause against it on a test. So be prepared.
