Traders in the AUDUSD are misbehaving from a technical standpoint, with both buyers and sellers failing to follow through at key levels
In the early European session, the pair broke below the 38.2% retracement of the move up from the June 23 low at 0.65096, as well as the 100-hour moving average just beneath at 0.6508. The price extended to a low of 0.6503, but quickly bounced back above both levels, triggering a rotation higher.
That upside momentum continued into the early North American session, helped by broad US dollar selling, which pushed the pair above its 200-hour moving average at 0.65319. The rally stalled at a session high of 0.6537, just shy of yesterday’s high, before the pair reversed back below the 200-hour moving average once again.
In essence, sellers had their shot below the 100-hour moving average and 38.2% retracement — and failed. Buyers had their chance above the 200-hour moving average — and failed too. The result is a market stuck in indecision. For a stronger directional bias to emerge, traders will need to break and hold either above the 200-hour MA or below the 100-hour MA and retracement support.
Zooming out, this kind of false break volatility is not surprising given the choppy price action (just look at the intraday and overall ups and downs).
One area to watch, however, is the resistance zone between 0.6536 and 0.6542, which continues to act as a short-term ceiling over the last few days. Although the pair briefly spiked above this zone last Wednesday on the "Powell will be fired" headline, the move quickly reversed — reinforcing sellers’ control at that level.
That said, today’s sharp rebound challenges that bearish bias, but so far, resistance is holding. Traders will be watching closely to see which side finally gains conviction.
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