The AUDUSD has been stepping higher over the last five or so trading days and in the process has used a series of key moving averages that have increased the bullish bias and provided the roadmap for the move to the upside.
- 5 days ago, the price based against the 200-day moving average and moved higher.
- 4 days ago it based against the 200-bar moving average on the 4- hour chart and the 100 day moving average. The price moved higher.
- 3 days ago the price based against the 200 hour MA and a swing level (near 0.6700). The price moved higher.
- Yesterday, the price moved above its 100-bar moving average on the 4-hour chart and then based against the level and moved higher
In trading today the price moved above a swing area between 0.6748 and 0.67604, but could not keep the momentum going.
As a result there is some apprehension. That makes sense given the key FOMC rate decision tomorrow.
So what next?
If the pattern continues, traders should continue to find support near the last broken level. That would be the 100 bar moving average on a four hour chart at 0.6732. A break below that level would likely see more selling on the topside break disappointment.
Conversely, raking back above the 0.67604 level, and we should see increase momentum with the high prices from the end of August between that level and 0.68232.
Buyers remain in control, but there was a minor failure on a break today which could lead to more downside probing if support is broken near 0.6732.
This article was written by Greg Michalowski at www.forexlive.com.
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