Forex technical analysis: AUDUSD wander lower on the day after failing to sustain an earlier rally

Technical Analysis

Author: Greg Michalowski | audusd

RBA meeting minutes to be released in the new trading day

The AUDUSD last week, held below the 100 day MA (blue line in the chart above). There were two peeks above the MA line but each failed.  On Friday, the pair started to move further away and today has seen a move higher during the Asian Pacific session, but a rotation and lap back lower in the London/NY trading session.  The current price is trading slightly lower than the Friday closing level (down about 12 pips). 

Does the failure to extend above the 100 day MA/38.2% retracement a sign the correction is over?  It looks that way although the market may be more two-way with support at 0.7000 and resistance against those topside technical levels.  

What would keep a bearish bias in the new trading day? The hourly chart gives traders some clues.

Looking at the hourly chart, the move lower in the 2nd half of the day, took the price back below the 100 and 200 hour moving averages (blue and green lines in the chart below). Those moving averages are converged at the 0.7281 area.  With the current price below those levels, the sellers are back in charge as the new day looks to begin.  

What would give sellers even more confidence?  

On the downside, keep an eye on the 0.7234 area. A move below this level - was a swing high on October 7th and near a corrective low on October 14 and again earlier today - should solicit more selling momentum on a break in the new trading day.  

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