AUDUSD is looking to go into 2022 with a more bullish bias longer term
The AUDUSD in 2021, reached its high for the year on February 25th at 0.8006 which was near a nice natural resistance of 0.8000. The price low was not reached until the December 3rd at 0.6992 (also near a natural support level at 0.7000). The range of 1014 pips compares unfavorably to 2020s range of 2260 pips, but is more than the 619 pips in 2019.
The other recent trading ranges shows the range in 2021 was around the middle of recent yearly trading ranges.:
- 1400 pips in 2018
- 950 pips in 2017
- 1015 pips in 2016
Looking at the weekly chart above, the price high this year moved to the highest level going back to the week of January 21, 2018 but came up short of the 2018 and 2017 highs at 0.8135 and 0.8124.
The fall from the high saw the price step down toward the 200 and 100 week MAs in the middle to end of August (see green and blue line). The lows in August, and again toward the end of September.
The bounce higher off of the September low (against the 100 week MA) saw the pair move back up to test the swing area between 0.7477 to 0.7554 (the price high 0.75549) on October 28. That high was also running into the 200 day on the daily chart (see green 200day MA on the daily chart below).
The inability to extend above that swing area from the weekly chart, and also the 200 day MA from the daily chart, was the go-ahead to move lower into the end of the year. In the process, the pair moved down through the near converged100 and 200 week MAs (blue and green lines), on the way to the low for the year 0.6992. That low on the weekly chart stalled within another swing area between 0.6690 and 0.70525. The last swing lows from 2020 stalled right near the low in 2021. Support buyers leaned.
The final move into year end has seen the price move higher (off those swing area – red circles in the weekly chart) and back above both the 200 week MA and 100 week MAs at 0.71735 and 0.72183 respectively. The current price is trading at 0.72528.
What does the current technical picture say for the bias into 2022?
With the price bouncing off lower swing area, clearly bottom pickers leaned and gave the price a boost. Getting back above the 200 and 100 week MAs is another step in the bullish direction, but only if the price can stay above those levels going forward. A move back below the 100 week MA at 0.72183 and the 200 week MA at 0.71736 would take any positive bias away from the buyers and put the sellers more in control.
Move below and sellers would target the 38.2% or the move up from the 2020 low at 0.70525 and the lows from 2021 (and the 2nd half of 2020 too) at 0.6990. A break of those lows would increase the bearish bias and have traders looking toward the 50% retracement at 0.67578.
What if the weekly MAs can hold support? What levels are key on the topside at the start of the year?
Looking at the daily chart, the falling 100 day MA currently comes in at 0.72859. The high price in December (this week) has reached 0.72754. If the price can get above that MA level, it would give the buyers more confidence, and have traders looking toward the 38.2% of the 2021 range at 0.73796, followed by the 200 day MA (green line) on the daily chart at 0.74428 (and moving lower). That MA stalled the rise at the end of October, and would be a key target to get to, and through, if the buyers are to take more control.