The AUD/USD currency pair faced immediate selling pressure during early Asian-Pacific trading today, drifting lower to test the resolve of the bulls. This decline brought price action directly into a critical technical convergence point: the rising 200-hour Moving Average (MA), currently located at 0.66366.

For technical traders, this moving average serves as a vital barometer for the short-term trend. The good news for buyers is that the level held firm. The price successfully rebounded off this dynamic support line, pushing back above the interim 100-hour MA at 0.66519. However, the recovery has been far from smooth. Despite multiple attempts to extend gains, the pair has repeatedly stalled, failing to penetrate a distinct “swing area” established over the last three trading days near 0.66588.

The Current Landscape: A Reluctance to Push Higher

Despite the broader, longer-term bullish trend remaining intact—and the successful defense of the 200-hour MA—market sentiment appears hesitant. The inability to break through immediate overhead resistance suggests that buyer exhaustion may be setting in, or at least that traders are waiting for a stronger catalyst before committing to new highs.

We are currently witnessing a classic technical tug-of-war. The market is squeezed between rising support and a stubborn ceiling, signaling that a volatility breakout could be imminent.

The Bullish Scenario: What Buyers Need to Prove

For the bulls to regain full control, holding the 200-hour MA is necessary but not sufficient. They are currently trapped in a consolidation zone and need to clear specific hurdles to reignite the uptrend:

• The Immediate Hurdle: The first step is a decisive break and close above the 0.66588 swing area. This has acted as a “lid” on price action for days.

• The Next Target: Clearing that ceiling would shift focus to last week’s high at 0.66848.

• The Ultimate Goal: If momentum carries the pair through last week’s high, it opens the door for a run toward the major September high at 0.67063.

The Bearish Scenario: What Sellers Are Watching

Sellers are currently banking on the 0.66588 level holding firm. As long as the price stays below this swing area, the bears remain in the game.

• The Strategy: Sellers are hoping the repeated failures at resistance will drain bullish momentum.

• The Trigger: The key victory for the bears would be a break below the rising 200-hour MA (0.66366) with conviction. Such a move would invalidate the immediate bullish setup and likely trigger a deeper correction.

Watch the Video Analysis

In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving this move in real-time. I outline exactly where the risk lies, how to interpret these moving average bounces, and map out the next targets that matter most for the AUD/USD currency pair.

Be aware. Be prepared.