AUDUSD moves back into the old floor area

The AUDUSD is moving down as some risk off flow are kicking in as stocks continue the move lower today.

Looking at the weekly chart, the move lower has taken the pair back within the swing area going back to July 2020 between 0.6966 and 0.7005.

That area was home to swing lows (and a floor) from

  • July 2020,
  • September 2020,
  • October 2020,
  • November 2021,
  • December 2021 and
  • January 2022 (see red numbered circles).

Last week, the price moved below that area on its way to a 2022 low (and lowest level since June 2020) of 0.68284 (on Thursday). The price bottomed, and has stepped higher over the last 3 trading days.

Yesterday the price made its way above the 0.7005 high point of that swing area. Today the high price extended above 0.7005, and reached 0.7047 in the early Asian session before rotating back to the downside.

The low price just reached 0.6970 just above the lower floor area target at 0.6966. A break below 0.6966 would be more bearish.

Drilling to the hourly chart below, just below the 0.6966 level is the 200 hour moving average at 0.69612, and below that is the rising 100 hour moving average at 0.69521. Those levels will also help to define the bias going forward. If all 3 levels are broken, the sellers are more in control. Conversely, holding support would keep the buyers in play (albeit with a weak hand).

Of note regarding the price action today is that the high price of 0.7046, stalled just short of the 50% midpoint of the month of May's trading range at 0.7047. The high today also stalled ahead of the swing high from May 11 at 0.70545.

The inability to extend above those targets was a bearish technical development that gave the sellers something to lean against near the highs. Although the price traded up and down for most of the trading day, the 50% midpoint was never in jeopardy of being broken. The risk defining sellers were rewarded with the move lower.

Now it is the sellers turn to either take more control or relinquish to dip buyers against support.

AUDUSD looks to test the 100/200 hour moving averages

Meanwhile, stocks continue to get hammered and make buying the AUDUSD a bit difficult as risk off flows could really start to kick in.

  • Dow industrial average is down -1100 points or -3.41% at 31541.32
  • S&P is down 159 points or -3.89% at 3929.91
  • NASDAQ index is down -557 points or -4.65% at 11426.62
  • Russell 2000 is down 69.18 points or -3.76% at 1771.11