The AUDUSD moved higher yesterday post the FOMC rate decision. Lower yields and higher stock prices helped the buyers. IN the process, the pair moved above the swing high from August and January at 0.7136 and 0.7142 respectively. The high price yesterday reached 0.7144. The high today reached 0.7157.
The buyers took their shot. They missed as momentum could not be sustained and the price started to move back to the downside.
Looking at the hourly chart below, that move to the downside started after two shots above the the January high at 0.7142. The next high found sellers near the 0.7142 level. That gave the sellers the go-ahead to push to the downside.
What happened?
The selling over the last few hours has seen the price fall to the rising 100/200 hour MAs. Those MAs are at 0.7078 and 0.7080. Below that, a swing area between 0.7057 to 0.7063 represent a lower target area (see red numbered circles. The low price reached 0.70696 and has bounced modestly The price trades near the MA levels.
Buyers and sellers are battling it out near MA support.
The move back to the downside comes despite another solid day in the stocks. The S&P is up 1.27% after rising 1% yesterday. The Nasdaq is up 2.81% after rising 2% yesterday. The Dow is down admittedly as funds head into the tech sector. Yields meanwhile are lower with the 10 year down -3.1 basis points.
Although there is risk on flows, the commodities are not following the storyline. Gold is down -$32.19 or -1.65% and copper is down -1.7%. That may be putting a limit on the topside today.
So traders will be watching down to 0.7057 for support. Break below and the bias shifts more to the downside. Dip buyers, that is a risk defining level as well.
Hold and a run back to 0.7125 is the next upside major target again.
Move below and the door opens for more corrective selling in the AUDUSD.
