The AUD is the lone wolf against the US dollar today, gaining ground while the other major currencies are lower versus the greenback.
Buyers build on last week’s support
Technically, the recovery got its start last week when buyers held support within the swing area between 0.69056 and 0.69205. Sellers could not push through that floor, and the price rotated back to the upside heading into the weekend.
In trading today, an initial move lower found support near 0.69334. Buyers leaned against that level and restarted the move higher, pushing the pair back into swing-area resistance between 0.69619 and 0.69778. The high reached 0.6973, with the current price just below that level at 0.6971.
Above 0.69778 would strengthen the bullish bias
The buyers are making a push, but they still have work to do. A move above 0.69778—and the ability to stay above it—is needed to strengthen the bullish bias. Until then, sellers have a resistance area to lean against and a level to define their risk.
Trader education: A break needs follow-through
For newer traders, getting to resistance is one step. Breaking above it and holding the break is what shows buyers are taking more control. If the price cannot get through, the recovery remains vulnerable to another rotation lower.
In the video above, I outline the key levels in play and explain why they matter as we head toward the end of the day and into the new trading day in the Asia-Pacific session.
This article was written by Greg Michalowski at investinglive.com.