Sellers in control
The AUDUSD has trended lower in trading today. Concerns about the impact of the fires are starting to way more on the currency. Traders are beginning to discount a cut by the RBA at their next policy meeting (on February 4). The expectation has risen to about 56% currently.
You can see the trend like action in the 5 minute chart below. After consolidating in the Asian session, the price moved below the 100 and 200 bar MAs (blue and green lines) and stepped lower with modest rebounds. Steps lower with modest corrections are a chief characteristic of a trend-like move.
Looking at the chart above, each of the trend legs lower has stalled at or below the 38.2-50% retracement of the leg lower. That technical clue, keeps the sellers more in control (see yellow area and green numbered circles).
The last trend move from 0.68863 to 0.68609 has been a more modest trend run, but the correction has still stalled in the yellow area (see green circle 3). That keeps the trend move alive. It would take a move above the 0.6872 level (the 50% of the last leg lower), to give the dip buyers a minor "win". If broken on the topside, the falling 100 bar moving average would then be the next potential "victory" for the dip buyers.
Failure to do that, and the sellers are firmly in control.
Taking a broader look at the hourly chart there is some reason to pause. Going back to December 17, December 18, and December 19 the pair had swing levels in the 0.68609 to 0.68634 area (see yellow area in the chart). That is giving traders some cause for pause of the trend. The question now (for buyers and sellers) is can the support swing area stall the support. If not the 0.6848 and then the December 17 at 0.68377 are the next targets on the trend move today.
PS. the AUDUSD has been down for 4 consecutive days.
