This paper examines how moving target defenses (MTD) implemented in power systems can be countered by unsupervised learning-based false data injection (FDI) attack and how MTD can be combined with physical watermarking to enhance the system resilience. A novel intelligent attack, which incorporates dimensionality reduction and density-based spatial clustering, is developed and shown to be effective in maintaining stealth in the presence of traditional MTD strategies. In resisting this new type of attack, a novel implementation of MTD combining with physical watermarking is proposed by adding Gaussian watermark into physical plant parameters to drive detection of traditional and intelligent FDI attacks, while remaining hidden to the attackers and limiting the impact on system operation and stability
