The RBA semi-surprise cut in rates sent the AUDUSD sharply to the downside in trading today (lowest level since May 2009) .
As pointed out in the post from after the cut last night (see:Forex technical trading: AUDUSD tumbles to new lows going back to May 2009 on RBA cut) , the move lower was pushing to new extremes with little in the way of support except the lower trend line on the hourly chart. Well… the lower trend line held support (see chart below). When risk can defined and limited, traders will tend to give it a shot.
AUDUSD tumbled but found support against the lower trend line.
Now what?
The after holding a key support target, the focus turns to the correction and resistance above.
Looking at the 5 minute chart below, the price for the AUDUSD has been able to extend above the 100 bar MA (blue line and stay above). In the early NY session, the price came right down to the line and bounced. The subsequent move higher, has taken the price to the 38.2% retracement of the move down from today’s high to today’s low (at 0.7704). The 0.7700 level was the old low going back to July 2009. The low from last week came in at 0.7719. The 200 bar moving average is currently at 0.7711. So with all that overhead resistance, we are now seeing some sellers re-enter against this area. Stay below the 0.7719 level, and the sellers will breathe a sigh of relief.
Having said that there still is the question of getting back below the 100 bar moving average on the 5 minute chart. That level currently comes in at the 0.7668 level. A move below this level will be needed to show that the sellers are back in control. Given the action by the RBA, this level should give way at some point. The caveat is traders can get offsides and the dollar is not having a great day as GBPUSD, EURUSD rebound, and even USDCAD moves a bit lower. So a battle is on for the rest of the trading day with the 100 bar MA on the downside and the 38.2%, 200 bar MA and 0.7719 level on the upside.
AUDUSD has corrected up to a cluster of resistance from 0.7704-19.