The 100 SMA Takes its Turn as Resistance for AUD/USD
AUD/USD has retraced higher in the last few sessions, but the 100 SMA is doing a good job as resistance
[[AUD/USD]] has turned quite bearish in the last two weeks, especially last week, losing around 100 pips from top to bottom. This pair used to be bullish in October, after US manufacturing sector fell deeper into contraction, which turned the USD bearish.
The increase in the unemployment rate in Australia last Thursday gave this pair another push lower. During last week, the 50 SMA (yellow) was acting as resistance for AUD/USD. This moving average provided resistance several times during pullbacks higher and reversed the price lower.
It’s for this reason that we decided to go short on AUD/USD last Friday as this pair retraced to the 50 SMA. The retrace was complete, with the stochastic indicator being oversold on the H1 chart. But, the retrace continued higher and the price reached the 100 SMA (green), which took its turn in providing resistance late on Friday.
This moving average has been providing resistance since then, which is great for us since we are short on this pair. Now let’s see if the sellers will return again and the downtrend will resume. Although, the USD seems pretty weak again today, so it will be a tough battle between buyers and sellers.
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