The Australian dollar fell against the US dollar a week ago as a result of the stronger-than-expected US jobs report.
However, the price remained above the 200-bar moving average on the 4-hour chart (green line on the chart below). It wasn’t until Monday when the price broke below this level (currently at 0.6779) and fell.
The low initially stalled against the 38.2% retracement of the move up from the August low at 0.67146 and bounced higher against the swing zone high at 0.67604. This has increased the importance of the retracement level.
Since then, the price has moved lower and traded six separate 4-hour bars below the 38.2% retracement level. However, after the price started approaching another swing zone between 0.6685 and 0.6696 along with its 100-day moving average, sellers turned into buyers, and pushed back above the 38.2% retracement level. The sellers had their shot. They missed it.
Not being able to stay below the 38.2% retracement level was a failure and will now become a major target – it not only needs to break – it needs to stay broken today and into next week.
Moreover, the price needs to decline and stay below the 100-day moving average at 0.6692.
So overall, there is resistance nearby at 0.6760. There is nearby support at 0.67146. Breaking out and staying below the low number or breaking above the high would prompt traders to shift the bias in the direction of the breakout with work to do.
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