AUDUSD traders respect support and resistance today. That increases the levels importance going forward.
The AUDUSD moved lower during the Asian-Pacific session, extending away from its nearly converged 100- and 200-hour moving averages. The move lower, however, stalled at a key technical support area where a rising trendline intersected with the lower boundary of a swing area near 0.6961. The low reached 0.6963, just above that support. Buyers leaned against the level, using a break below as their risk-defining point, and successfully turned the pair back to the upside.
The rebound carried the price back toward the cluster of hourly moving averages, with the 100-hour MA at 0.6986 and the 200-hour MA at 0.6991. That area once again attracted willing sellers. The rally stalled against the dual moving averages, and the price has since rotated back lower to trade around 0.6973, keeping the pair trapped between well-defined support and resistance.
From a technical perspective, both buyers and sellers accomplished what they needed to do. Buyers defended the rising trendline and swing support, preventing a deeper decline. Sellers, meanwhile, protected the converged 100- and 200-hour moving averages, capping the recovery.
As a result, the roadmap remains straightforward. The rising trendline and the 0.6961 swing area continue to define the downside risk. Stay above those levels, and buyers remain in the game. On the topside, the converged 100- and 200-hour moving averages remain the key hurdle. A move above those moving averages would increase the bullish bias and have traders looking for additional upside targets. Conversely, a break below the trendline and swing support would strengthen the bearish bias and shift the focus toward lower technical targets.
This article was written by Greg Michalowski at investinglive.com.