The 100 and 200 day MA at the 1.02677 and 1.02495 levels respectively (blue and green lines in the chart above), has put the AUDUSD at a crossroad.  The high extended to 1.02769 today, but two attempts above the top extreme  (at 1.02677) failed and the price is currently back below the lower of the two key levels (i.e., 200 day MA at 1.20495).  The good news for the bulls is although at key resistance, the price has been able to find support against the 50% of the 2012 high to low trading range. That level comes in at the 1.02168 level.  The low reached 1.02111.  So traders today are using the resistance above and support below to define the trading range at the moment.

   

Last week the price marched higher on increased risk appetite and rally in commodities. The price of copper – which tends to move with the AUDUSD – moved higher with the pair (see chart below).  The move in commodities was on the thought that central banks will be more accomodative going forward.  However, if global demand slows – and we saw the JP Morgan Global PMI index fall to 48.9 from 50.6 today (see prior post) – a move back down might be expected. 

For the time being, however, the price and tools should tell the story.  With the price testing and failing on the move above the key resistance on the first test today, traders will likely use these levels to define and limit risk.   Look for patient sellers  on moves higher, with stops above the high for today at the 1.0277. 

If the markets appetite toward risk slows (and there is a corresponding decline in commodities like copper), a move through the 1.02167 and 1.0211 will signal the top may be in place. Look for momentum on a break.