The AUDUSD saw strong buying yesterday on "Risk on" sentiment after the FOMC decision. The price moved above the 38.2% retracement of the last move down at the swing high at 0.71929. The price also extended above the high from April 26 at 0.7227 and the 50% midpoint of the same move down from April 26 at 0.72434.
The AUDUSD did run into resistance yesterday right near its 100 day moving average at 0.72603. The high price yesterday reached 0.72637. The high price today reached 0.72656. Small breaks but not much momentum.
Today, sellers took the clue from the 100 day moving average resistance, and started to lean/correct more to the downside. The GBPUSDs tumble and continued selling on the back of falling US equities (and rising rates) has now taken the AUDUSD pair back down to the 200 hour moving average at 0.71313 (green line in the chart above). The 100 hour moving average comes in at 0.71183 (blue line in the chart above).
There may be some dip buyers against those moving averages as risk can be defined and limited. However, traders are heading for the exits in equities. As a result, if the price starts to trade below the 200 hour moving average and then at 100 hour moving average, I would expect the selling to continue.
It's hard to catch a falling knife. The knife is falling.
The NASDAQ is now down -481 points or -3.71%. The S&P is down -108 points or -2.5%. 10 year yields are up 13.1 basis points to 3.0464%. A new cycle high for that tenor.
