The AUD/USD increased significantly and has managed to recover after the impressive drop, but you should know that the pair remains under massive selling pressure on the Daily chart, so a further drop is favored on the short term. Personally, I believe that only a USDX significant drop could force the AUD/USD to climb towards the 0.7850 level.

Price is pressuring the 0.7800 psychological level, remains to see if will have enough energy to close the day above this obstacle.

It is very important to see what will happen on the USDX, the upside movement was paused for the moment as the bulls seem exhausted. Personally, I believe that the AUD/USD rebound is only temporary, the rate could drop much deeper on the short term. The today’s increase is natural and was expected after the massive drop.

The Aussie started to increase after the Australian and the Chinese data was sent to the public. The figures failed to impress today, but the Aussie wasn’t impressed. The Australian Home Sales have dropped by 2.3%, more versus the 1.1% estimate and after the 1.6% growth in the former reading period. The Chinese CPI increased by 1.5%, matching expectations, while the PPI increased only by 4.3%, less versus the 4.4% estimate and versus the 4.9% growth in the previous reporting period.

The price rallied in the last minutes and jumped above the 0.7820 level and above the lower median line (lml) of the minor ascending pitchfork. It has touched the first warning line (wl1) of the descending pitchfork.  Only a valid breakdown above the mentioned dynamic resistance levels will confirm a further increase on the short term.

However, a rejection from here will signal a further drop, maybe the rate has come back only to test and retest the mentioned levels before will resume the corrective phase. Technically, it is expected to me attracted by the lower median line (LML) of the major blue ascending pitchfork.