AUD/USD drops fast and resumes the bearish momentum. Has managed to take out a major dynamic support and now is expected to drop further in the upcoming period. I’ve said in the previous report that we have to wait for a confirmation that will drop further, we could have one since today if the rate will close somewhere near the 0.7980.
Has come back in the negative territory, a further USDX increase will send the rate much lower. Technically is trapped within an ascending channel, so the perspective remains bullish on the daily chart despite the current drop.
The AUD/USD rallied in the morning, even if the Chinese data have disappointed, the Industrial Production rose by 0.6% in August, failing to reach the 6.6% estimate and the 6.4% growth in the former reading period, while the Fixed Asset investment rose by 7.8%, less compared to the 8.2% estimate and versus the 8.3% estimate. The Retail Sales increased only by 10.1%, less versus the 10.5% estimate and less versus the 10.4% in the former reading period. The Foreign Direct Investment disappointed as well.
The AUD received support only from the Australian Unemployment Change, which has increased from 29.3K to 54.2K, beating the 17.5K estimate, the Unemployment Rate remains steady at 5.6%, matching expectations.
The greenback is somehow expected to increase after the positive United States data, the USDX has finally managed to breakout from a minor descending channel, signaling a larger rebound.
Price has finally managed to drop below the upper median line (UML) of the major ascending pitchfork, a retest will bring us a great selling opportunity. I’ve said in the previous article that could drop further if will stay below the upper median line (UML) of the major black descending pitchfork. I’ve drawn the descending pitchfork hoping that I’ll catch another leg lower.
The next significant downside target will be at the 50% Fibonacci line (ascending dotted line). Could be attracted by the lower median line (lml) of the minor black ascending pitchfork, actually, could hit the confluence area formed between the lower median line (lml) and the 50% line.