AUDUSD started the week by testing the bottom of the swing zone (going back to early May) near 0.6579 and also the 38.2% retracement of the upward move from the April 2024 low to the May high near the same level.
Sellers pushed the price below this level early on Monday of this week, but they were unable to maintain the momentum and the price began to rotate back to the upside.
Weaker US CPI data pushed the price higher. The subsequent high price this week (reached on Wednesday) moved above the top of the swing zone that has confined the pair since early May at 0.66896. Buyers entered to reach the highest level of the week at 0.67037.
However, by the end of Wednesday, the price was back below the swing zone top at 0.66896 and the buyers turned back to the sellers.
Today, the bearish momentum continued with the pair moving below a group of moving averages including:
- The 100-bar moving average on the 4-hour chart is at 0.6635
- The 200-hour MA is at 0.66316
- The 100-hour MA is at 0.6625, and
- The 200-bar moving average on the 4-hour chart is at the same 0.6625
The MA range between 0.6625 and 0.6635 is now resistance. If the technical indicators return to the upside, it is necessary to go beyond that area.
Today's low reached 0.6591 ahead of the 38.2% and 0.6579 retracement levels.
So what do all the ups and downs say?
- The market is uncertain about the directional bias
- At some point, the market will break out of the bullish and bearish range.
As the end of the week and the new trading week approaches, traders will need instability at 0.6579 to increase the bearish bias.
If they are unable to do so, and the price moves back above the set of moving averages up to 0.6635, that would shift the bias back in favor of the buyers once again.
The battle continues. Sellers have more control over the moving average range, but unless the 38.2% level is broken, the battle will continue.
