The AUDUSD trended to the downside for most of the Tokyo and London session. However, after breaking below the shallow channel support line in the 5 minute chart above, the price decline stalled and a correction higher started….
The modest corrective wave stayed below the 50% of the last leg of the trend down. This keeps the dip buyers nervous and the shorts still in charge. I would expect that if the price moves above the 1.0500 level, there would be more short covering/correcting with the 200 bar MA in the same chart above the next target (see green line). If that 1.0500 level cannot be breached, be aware that although the downside is preferred, there might be buyers on dips near the low (with stops below). The 1.0400 area remains a key support target as it represents the 200 day MA and 38.2% of the move up from the November 2011 low.