Should it stay or should it go....
Yesterday, I drilled down into the AUDUSD currency pair (if you missed it, here is the link to the video).
The pair had held resistance at the October and December 2015 highs at 0.7385. It fell below the 100 day MA and 50% retracement (see chart above) and closed below that MA level at 0.7335 today. That is bearish. That was a big deal. There were other little technical bearish clues from the hourly chart like holding below the topside trend line on the hourly chart (see hourly chart below).
So what happened?
The momentum died, the price started to push back higher. The trend line was broken on the hourly chart. Then the price moved back above the 100 day MA and the 50% retracement too.
The pair is having some second thoughts on the bearish break as the bride came down the aisle. Uh-no.
Traders who covered below either on the move back above the hourly trend line or the 100 day MA are likely waiting to see if there is another push below the 100 day MA. At the start of the NY session there was a little peek back below (the price moved to 0.7325 - the 100 day MA is at 0.7335) but that failed as stocks moved higher and commodities are also higher today. Keeping the bears more hopeful, is the 0.7385 level has not been tested and the 100 hour MA remains overhead (and potential resistance).
That of course can change with a push. With a failure to move back below the 100 day MA and the 50% retracement on this afternoon dip going on right now. Key dip here before the local traders arrive. Traders are so far, buying and hoping the bearish groom gets cold feet and buys - leaving the bearish bride at the altar...
In the new trading day, the RBNZ Financial Stability Report may have an influence on the AUDUSD (just because can ying and yang togeither). THe Westpac Consumer sentiment will also be released at 8:30 PM ET/0030 GMT (last -4.0%). Home Loans are also expected to be released at 9:30 PM ET/0130 GMT) with estimates at -1.4% vs +1.5% last.
