AUDUSD rebounds into a swing area resistance target. What next?

The AUDUSD – like other pairs vs the USD today – has moved sharply lower over the last 6 /7 trading days, over that period, the high price on November 7 reached 0.6687. The low price on Thursday last week reached 0.64402.

At the high, the price stalled just ahead of the 100 day MA. At the low, the price was just above a swing level going back to August 5 (the day of the Japan carry trade unwind). The swing low on that day came in and 0.64349.

In trading on Friday, the price traded up and down with resistance near the high of a swing area between 0.6471 and 0.6479. In trading today, the Asian session high stalled near that level as well but after falling into the early US session, the price started to move higher with the decline in yields and the overall decline in the US dollar.

The move to the upside was able to get through 0.6471 – 79 swing area, and has now reached the higher swing area target at 0.6506 to 0.65129. The price has stalled within that swing area and remains a key short-term barometer for both buyers and sellers as we head into the new trading day.

• Move above would open the door for more upside momentum with a swing area from the last three weeks between 0.6535 and 0.65537 along with the falling 100 bar moving average on the 4-hour chart at 0.6567 as an upside target levels.
• Conversely, if resistance does hold, the rotation back lower toward 0.6471 to 0.6479 would be targeted followed by the swing level at 0.64349.

This article was written by Greg Michalowski at www.forexlive.com.