AUD/USD is trading lower this week after breaking below a rising trendline, but sellers have not managed to push the pair through a key support area. The 0.7117 to 0.71324 swing zone, reinforced by the four-hour 200-bar moving average, now sets up the next directional test ahead of the FOMC rate decision.
Sellers tested support but could not hold it
The decline carried AUD/USD into a swing area between 0.7117 and 0.71324, where the four-hour 200-bar moving average also sits, adding to the zone's technical weight. Price briefly slipped below both the swing area and the moving average, but sellers could not sustain the move, and the pair has since drifted back into the support zone.
That failure to hold below the zone matters. Sellers still need a break under 0.7117 and the four-hour 200-bar moving average, followed by an ability to stay below it, before the bearish bias strengthens. If that happens, the next downside targets become 0.70950, the 38.2% retracement of the move up from the late-June low, and 0.70789, the 100-day moving average.
What buyers need to prove
Holding the current support and resistance zone gives buyers something to build on, but they still have more to demonstrate. Their first target is 0.71492, a level that acted as support late last week before turning into resistance early this week as the price turned lower.
A move above 0.71492, and the ability to stay above it, would hand buyers more control. From there, the next targets become the four-hour 100-bar moving average and the underside of the broken trendline.
The roadmap into the Fed decision
The technical picture ahead of the FOMC breaks into three zones. Above 0.71492, buyers gain more control and can look toward the four-hour 100-bar moving average and the broken trendline. Between 0.7117 and 0.71492, the pair stays in a decision area where neither side has confirmed control. Below 0.7117, with price staying below it, sellers gain the upper hand and bring 0.70950 and 0.70789 into focus.
The Fed decision will likely set the next directional push, but until then these levels are the roadmap for who takes control.
Source: Investinglive RSS Breaking News Feed
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