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The AUDUSD pair has experienced significant volatility this week, with sharp price swings in both directions. Initially, the pair traded below its 100- and 200-hour moving averages, but then rebounded aggressively due to the FOMC reaction, a decline in the USDJPY, broad U.S. dollar selling, and stronger equity markets. The pair climbed back above its 100- and 200-hour moving averages, extending above the 38.2% retracement of the decline from the May high to the late-June low at 0.7022. However, today's trading brought another twist, with renewed dollar buying pushing the pair lower, but sellers were unable to force a break below the rising 200-hour moving average at 0.6987.
The technical picture still leans modestly in favor of the bulls as long as the pair remains above its 100- and 200-hour moving averages. A sustained move above the 38.2% retracement at 0.7022 would strengthen that bullish case and have traders targeting the 100-day moving average at 0.7052. On the other hand, a move back below the 200- and 100-hour moving averages would shift the bias back toward the sellers and signal that another leg lower may be underway.
The implications of this volatility are significant for traders, who must navigate the complex technical landscape to make informed decisions. The key technical levels, including the 100- and 200-hour moving averages, will continue to provide a roadmap for traders. As the market continues to evolve, traders will need to remain vigilant and adapt to changing market conditions to capitalize on potential opportunities.
