The AUD/USD rallied and resumed the last day’s rebound as the USD is punished by the USDX’s drop. The dollar index resumes the bearish movement and seems determined to reach new lows on the short term.
It remains to see what will happen because the rate is still located below some important resistance levels, only a valid breakout will signal a further increase. The AUD/USD moves somehow sideways on the Daily chart and most likely will continue this range in the upcoming weeks.
The pair could increase further as the USDX may drop further after the breakdown below a dynamic support. The USD drops further even if the United States data have come in line with expectations. The CPI increased by 0.2% in February, matching the 0.2% estimate, it has increased less versus the 0.5% in the former reading period, while the Core CPI increased by 0.2%, matching the 0.2% estimate, but the USD wasn’t impressed and has dropped sharply versus all its rivals.
On the other hand, the Aussie increased significantly even if the Australian data have disappointed, the Home Loans dropped by 1.1%, much more versus the 0.1% estimate, while the NAB Business Confidence decreased from 11 to 9 points.
he rate moves towards the second warning line (wl2) of the minor descending pitchfork and towards the upper median line (uml) of the major black descending pitchfork, actually, it could be attracted by the confluence formed between the mentioned resistance levels.
Price could reverse from the confluence area, but you should know that a valid breakout will accelerate the upside momentum. Price could drop again, only if the dollar index will rebound and will recover after the last drop. Another drop will come if the rate will fail to reach the levels mentioned.