AUDUSD lower on the day and back below its 200 hour moving average
The AUD/USD currency pair, is currently trading lower on the day and has dropped below its 200-hour moving average for the second time today. During the European session, the price had initially moved below the 200-hour moving average, but it found support from buyers near the high of a swing area between 0.6737 and 0.67546. Notably, the 50% midpoint of the upward move from the July low is also located within that area at 0.67466, adding significance to this support zone.
After bouncing from the mentioned support, the price climbed back up to retest the swing lows from Friday and Monday, located around 0.6787. However, the pair couldn't sustain the upward momentum and has since rotated back to the downside during the US trading session. The strength of the US dollar against most other currencies has contributed to the decline in the AUD/USD pair (a lower AUD/USD rate indicates a stronger USD).
As of now, the price remains below its 200-hour moving average, indicating a bearish sentiment in the short term. Traders and investors are closely watching how the pair behaves around the mentioned support and resistance levels, as they can provide insights into potential future price movements.
With the AUD/USD sellers now making a second move below the 200-hour moving average today, they are likely to gain more control over the short-term direction of the currency pair. Should the price manage to break below the 50% retracement level at 0.67466 and the low of the swing area at 0.67374, it would create an opportunity for further downward movement towards the key support zone near 0.6711. This zone includes the 200-day moving average and the 61.8% retracement level of the trading range observed in July, making it a significant potential support area. It is possible that the price may find some stability and buying interest there, at least on its initial test.
On the other hand, if the break below the 200-hour moving average fails for the second time, it could trigger a scenario where sellers who entered on the initial break become frustrated (as it didn't lead to a sustained decline). This frustration might lead to a reversal in the price, pushing it back up to the upside. If the price manages to climb above the level of 0.6786, it would likely boost buyer confidence and potentially lead to further upward movement.
In summary, traders and investors should closely monitor the price action around the 200-hour moving average, the 50% retracement level at 0.67466, and the swing area's low at 0.67374. The behavior around these levels will provide valuable insights into the market sentiment and the potential direction of the AUD/USD currency pair in the short term.
