Buyers are cautious against the 100 hour moving average. The RBA is expected to cut rates by 25 basis points in the new day tomorrow
the price of the AUD moved up to test its 100 hour moving average at the 0.67642 level. Sellers, however, leaned against the level and we have seen the price moved back down and to new session lows as well (just fell to 0.67400). The low is testing lows from last week at 0.67387 and 0.67429. So far sellers are leaning against the level.
It is month end/quarter end and the London 4 PM fixing just came and passed. So the price action to the downside may have been impacted by selling into that fixing.
Nevertheless, the holding of the 100 hour moving average on the topside increases that level's importance going forward. Stay below is more bearish.
Admittedly, the price action last week (and even for a brief moment today in the Asian session), moved above the 100 hour moving average, but ultimately failed (see red shaded areas).
On Thursday and Friday (and again earlier today), the price moved above the 100 hour MA but the breaks were for brief moments of time (2 hourly bars before moving back below the lines). Today's move was for less than 5 minutes.
The buyers are having trouble exerting their influence when the price does rise. Sellers are bending but not breaking. It will take a move above the 100 hour moving average (and staying above) to hurt the bearish bias.
For selllers, they need to push below the lows from last week to solicit more selling pressure.
A mini battle is going on intraday, but over the intermediate term, the sellers are more in control.
The Reserve Bank of Australia is expected to cut rates by 0.25% in the new trading day. That too is helping to keep a lid on the pair. The market is pricing in a 80% chance of a cut.
Eamonn in a post earlier today, gave 3 reasons why the RBA should cut. You can read his post HERE.
