The AUDUSD moved lower a week ago on the stronger-than-expected US jobs report.
However, the price remained above its 200 bar moving average on the 4-hour chart (green line on the chart below). It wasn’t until Monday that the price broke below that level (currently at 0.6779) and ran lower.
The low price initially stalled against the 38.2% retracement of the move up from the August low at 0.67146 and bounced higher stalling against a swing area high and 0.67604. That increased the retracement level’s importance.
Since then the price has moved lower and traded six separate 4-hour bars below its 38.2% retracement. However, after the price started to approach another swing area between 0.6685 and 0.6696 along with its 100-day moving average, sellers turned to buyers, and pushed back above the 38.2% retracement. The sellers had their shot. They missed.
The inability to stay below the 38.2% retracement was a fail and will now be a key target that – not only needs to be broken – but needs to stay broken today and going into next week.
Moreover, the price needs to fall and stay below, the 100 day moving average at 0.6692.
So overall, there is close resistance at 0.6760. There close support and 0.67146. Break and stay below the low number or breaking stay above the higher level would have traders shifting the bias in the direction of the break with work to do.
This article was written by Greg Michalowski at www.forexlive.com.
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