Forex Trading: AUDUSD in between support and resistance

In Australia last night, Building Approvals were down sharply (-5.7% MoM and -0.7% YoY).  The higher interest rates are beginning to cool the economy and with that hopefully bring inflation back to the 2-3 percent target level.

From a trading stand point, the move down was able to break the 200 hour moving average at the 0.9402 area and test the 100 hour moving average at 0.9362 (the low was 0.9364).  Often the market will pause at these intermediate length moving averages.

The market is now in between the two levels and a break up or down is the preferred trade today. 

The AUD (and the NZD for that matter) is wrestling with those traders on one hand who are interested in the carry trade, and those on the other side, who see a slowing economy and lower rates sooner, rather than later as global growth slows.  Watching the longer term moving averages tend to give the clue.