The AUDUSD got caught up in the late year selling on Tuesday and Wednesday – pushing above the 100 and 200 hour MA (blue and green lines in the chart below) and then the 38.2% of the move down from the December 11 high to the low on December 23. That level came in at 0.8197 area. The late fall on Wednesday and then the tumble today has seen the price move back below the 100 and 200 hour MA (blue and green lines in the chart below). However, the low today is finding support against the consolidation low levels going back to December 17 (at 0.8102 to 0.8108).
Is AUDUSD trading the range?
With the price below the 100 and 200 hour moving averages at 0.8141 to 0.8149, but above the 0.8100 area, the pair is a touch more bearish, but it can be a case where the pair is simply consolidating between the low value area of 0.8100 and a high value area of 0.8200. I will be watching any correction toward the 100 and 200 hour moving averages to see if sellers enter against that risk defining area. If they can keep the lid on the pair against that level, the bears remain in control. At the same time, I will be watching the 0.8100 area see if the buyers reenter on a dip and test of that key level.
So although the move lower has the bears more comfortable, there still is the question of doubt that were just consolidating near the lows. As a result, patient traders can use these levels to define risk, and limit risk (i.e. 0.8100, the 100 and 200 hour moving average levels at 0.8141/49, and the 0.8200 level). At some point there will be a break.
