AUD/USD moves higher to test the 100-day moving average
warned earlier, the pair looked set for a test of the daily moving averages.
For the time being, the 100-day MA will be a key defense level for sellers as it is also a level they held during the upside move in mid-March. As long as price stays below, the bearish sentiment remains.
But as I’ve highlighted before, the break of the “lower highs, lower lows” pattern is a key indicator that the downside momentum in the pair has likely stalled.
Should the 100-day MA give way, the next key level to look out for will be a confluence of resistance levels – the 200-day MA and the 50.0 retracement level. That will be the real test for the pair in any upside move.
A break there will be a strong signal that we will head towards 0.8000 again.
There isn’t any large option expiries for the pair today, so prices may not just be sticky at current levels or anything. So, watch for a tug of war at the 100-day MA in my view. That will be the important line to determine the next trending move in the pair.
If you’re trading the pair to move to the downside, you can lean on the MAs to define and limit your risk. As for trading the upside move, I’d reckon go with the break of the 200-day MA and 50.0 retracement level in order give you a clearer indication.