The AUDUSD started the week testing the low of a swing area (going back to early May) near 0.6579 and also the 38.2% retracement of the move up from the April 2024 low to the May high near the same level.
Sellers pushed the price below that level early on Monday of this week, but could not sustain momentum and the price started to rotate back to the upside.
The weaker US CPI data shot the price even higher. The subsequent high price this week (reached on Wednesday) moved above the high of a swing area that has confined the pair since early May at 0.66896. Buyer entered reaching a high for the week at 0.67037.
However, by the end of day on Wednesday, the price has moved back below the high of the swing area at 0.66896 and buyers turned back to sellers.
Today, the momentum lower continued with the pair moving below a cluster moving averages including the:
- 100 bar moving average on the 4-hour chart at 0.6635
- 200 hour MA at 0.66316
- 100 hour MA at 0.6625, and
- 200 bar MA on the 4-hour chart at the same 0.6625
That MA cluster between 0.6625 and 0.6635 is now resistance. If the technicals are to turn back to the upside, getting above that area is needed.
The low price today reached 0.6591 ahead of the 38.2% retracement and 0.6579.
So what does all the ups and downs say?
- The market is unsure of the directional bias
- At some point, the market will break outside the up and down range.
Going into the end of week and the new trading week, traders will need to get instable on 0.6579 level to increase the bearish bias.
If they cannot do that, and the price moves back above the cluster of MAs up to 0.6635, that would shift the bias back in the favor of the buyers once again.
The battle is on. The sellers are more in control vs the cluster of MA, but unless the 38.2% can be broken, the battle will continue.
This article was written by Greg Michalowski at www.forexlive.com.
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