The pair made a break for it today (and it was to the upside).
The pair has been trading mostly between 0.7577 on the downside and 0.7663 on the topside over the last 16+ days. Yes, the pair traded outside that range on three separate occasions (one to the upside and two to the downside), but generally speaking, the price has been chopping between the value area as traders struggle with the bias (bullish or bearish).
Today, the “market” had enough and broke outside of the “red box” (see chart above) and started to step higher and higher. The bullish bias actually began yesterday on the move back above the converged 100 and 200 hour moving averages. That tilted the bias back to the upside after mostly holding below those levels on Friday and again on Monday. Those moving averages were around 0.7625.
As I type, the price is now moving above a old swing floor area between 0.7699 and 0.7710. The high price has scooted up to a new intraday high of 0.7724. That is nearly 100 pips away from the 100 and 200 hour moving averages broken yesterday, and a run of 60 pips from the red box high break point today.
The next target comes in at the 0.77278 level which is and 61.8% retracement of the move down from the March 18 high. A move above that level opens the door for further upside momentum.
Traders looking for more upside will now use the 0.7700 level as close support. Stay above is more bullish.
Today's post is just a review of what happens when non-trending transitions to trending. The AUDUSD was non-trending on Monday, but technical clues (the break above the 100/200 hour moving averages yesterday and the break above the red box today) has led to a trend like move as the “market” decided and shoved the pair higher…Successful traders look at the price action on Monday and again yesterday as a prelude to a potential break. No one knows when the break will occur (and the trend), but if you anticipate the move, you have a better chance of having the “traders luck” go in your favor.