Trades above and below October 1 and October 6 high at 0.72084
The October 1 and October 6 high price for the AUDUSD reached 0.72084.
On Friday, that ceiling was broken to the upside with the price extending up to 0.72423.
Today, the price is wandering lower in choppy trading. The low price reached 0.72019 in the process. That was below the ceiling at 0.72084.
The price moving back to the old ceiling (and below it) shows that the market is unsure as to the next directional move. In a way, the break above the ceiling failed.
However, the inability to get below the natural support at 0.7200 level, helps to keep the buyers in play. A move back below the 0.72084 level and the 0.7200 level should be enough to kick start the downside further. Failure to do that and I will give the benefit of the doubt still to the buyers.
As Adam pointed out in early post, the price action in the pair is incongruent with the action seen in the stock market. With the major indices up sharply, one would expect to see “risk on” currency pairs like the AUDUSD moving higher. However that is not the case today with the decline in the pair.
Is the currency market telling us something? Are the stocks going a bit too far, too fast?
PS The major indices are off there high levels. The NASDAQ and index which reached a high price of 11965.53 is currently trading at 11886.27. That is still up 306 points or 2.65% on the day, but off the highs. The S&P index reached a high of 3945.85. It is currently trading at 3537.60. That too is still up 60 points or 1.74%. So far, there is not much of a reaction to the stock declines as well.