The AUDUSD has spent the past eight trading days trapped in a relatively tight range between 0.6961 and 0.7026, with little sign of sustained directional conviction. Right in the middle of that range sit the 100-hour and 200-hour moving averages, currently at 0.6991 and 0.6994. If price action remains contained, those two averages will converge even further over the next few hours. When the 100- and 200-hour moving averages come together, they typically reflect a market lacking a clear trend—and that has been the story for the past week and a half.
The encouraging part is that non-trending markets eventually transition into trending markets. The AUDUSD may be stuck in the mud for now, but periods of consolidation often lead to meaningful breakouts. The key for traders will be whether the eventual break is accompanied by enough momentum to sustain a directional move.
On the topside, resistance has been well defined by the 38.2% retracement of the decline from the May high to the late-June low, which comes in at 0.7022. A sustained move above that level would shift the focus toward the 100-day moving average at 0.7056, followed by the 50% retracement at 0.7071. A break above both of those technical hurdles would increase the odds of a run toward the 0.7100 area.
On the downside, a break below 0.6961 would signal that sellers are gaining control and open the door toward support at 0.6927, 0.6911, and ultimately the rising 200-day moving average at 0.6896. Notably, the AUDUSD has not traded below its 200-day moving average since November 25, 2025, making that level a key line in the sand. A decisive move below it would expose the June low at 0.6865.
Until one of those range extremes gives way, the 100- and 200-hour moving averages remain the market’s rudder. Trading above them would favor buyers and increase the odds of a push toward the top of the range, while trading below them tilts the short-term bias toward sellers and raises the probability of a test of the lower boundary. Currently, with the pair trading below both hourly moving averages, the near-term bias favors the downside, with sellers looking for a break below 0.6961 to generate the next leg lower.
Looking at the economic calendar next week, Australia’s CPI will be released on Wednesday. The expectations is for the year on year to remain unchanged at 4.0%
This article was written by Greg Michalowski at investinglive.com.