Down -1.40% on the day
The AUD is the weakest of the majors today. The JPY is the strongest, and that makes the AUDJPY the biggest mover. The AUDJPY has moved lower by -1.40% on the day.
What happened technically in the pair?.
Looking at the hourly chart above, the high price from yesterday stalled against the high price from last week's trading at 86.053. Both those highs were lower than the October 21 high price of 86.24. The inability to move above those levels was not necessarily full out bearish play, but it demonstrated consolidation, with the potential for a correction lower. Helping the more bullish sentiment yesterday was the holding of the 100 hour moving average (blue line currently at 85.516).
Today, the story line changed. The bias shifted - in the short term at least - more to the downside. Catalysts included:
- Breaking below its 100 hour moving average (blue line)
- Breaking below the rising trend line connecting recent lows (also near the 100 hour MA).
- Breaking below the 200 hour moving average at 85.408 (green line)
The move to the downside has also broken below the swing low from last Wednesday's trade at 85.04, and more more recently, the low from last week at 84.599.
There is no doubt, that the sellers are checking off target levels to the downside. Having said that, however, the pair trended higher from September 22 to the high on October 21 (about 744 pips worth of buying). The move lower today may be -1.4%, but the price is still only -175 pips from the high (of the 744 pip gain). Sellers are winning the short term for the technical reasons cited above, but the move is just a correction.
On further downside, the next target area comes between 84.272 and 84.396 (swing high and swing low from mid October). Move below that level and it opens the door further for more downside probing as long as broken levels can stay broken. The next major target would be the 38.2% of the 744 run higher. That comes in at 83.417. Getting to the 38.2% retracement is the minimum corrective move of the recent trend move higher.
What would ruin the sellers party?
Moving back above the 85.00 to 85.042 area would weaken the run lower momentum. For more aggressive shorts, a move back above the 200 and 100 hour MAs at 85.408 and 85.516 would not be a good look technically. That would certainly spoil the selling party
