Trending lower and lower today
When a pair trends intraday, it trends. What does that mean?
Looking at the AUDUSD 5-minute chart, the trend shows itself by moving through technical levels.
On the chart above, the pair fell below the
- 100 day MA at 0.7531 after moving above at the start of the day. There was a failure on that move and the buyers turned to sellers.
- The price fell to the 200 hour MA (green line currently at 0.75125) bounce a little and fell through.
- The fall below the 200 hour MA took the price to the 100 hour MA (at 0.7498) found some support. The bounce was modest.
- The fall below the 100 hour MA led to more selling
Along the way, the corrections of the "legs" are modest. If the corrections of the legs hold 38.2-50% that keeps the trend alive. The yellow areas are the 38.2%-50% of the recent trend legs.
Also along the way, the price stays below the trailing 100 bar MA (blue line at 0.7481 area now.
Ultimately, if on the trend, follow the price action, the corrections of the legs and the 100 bar MA. Stay below the 38.2%-50% of the trend leg and the bears in control. Stay below the 100 bar MA and the bears in control. If it goes above the trend move becomes more muddy.
What might also stall a trend move? (at least intraday).
Finding a key support level that attracts profit taking.
Looking at the daily chart, the AUDUSD - although trending lower and lower - is testing a key level. The 50% of the move up from the December low comes in at 0.7554. The low just reached to 0.74568. Some of the shorts (winners today) may look to buy against that level with a stop below. Some new longs may also stick a toe in the water too as risk is defined and limited against the level If risk is low, traders will get in the way of a trend move but only cautiously. If there is a break, they could quickly sell and take the small loss. If they are right, however, they could see that rebound toward the 100 bar MA on the 5-minute chart. Be aware. We are at a support level.
