The AUDUSD traded lower this week, testing the swing zone between 0.6575 and 0.6590. The subsequent move to the upside then tested the top of the swing zone between 0.6677 and 0.66896 (see chart below).
Staying within the confines of the “red box” where most of the trading has taken place over the past six to seven weeks, keeps up and down as the preferred trading strategy.
The price decline from the high has now reached the 100 and 200 bar moving averages on the 4-hour chart. Both of these moving averages are close to convergence at 0.6638. It also represents the level of identification of bias between the two extremes.
A move below the moving averages now would tilt the technical bias more in the seller's favor with lower trading ranges as the next key targets (bottom of the red box).
Staying above the moving averages keeps buyers in greater control, and the door is open to retest the top of the trading range (above the red box).
At some point, the red box will be broken and will remain broken as market traders discover the next trend-like move. Right now, buyers and sellers are happy to trade in this range.