The AUD/USD has decreased and has extended the sell-off, has broken through an important confluence area, a valid breakout will attract more sellers, which will lead the rate towards fresh new lows. The Aussie continued the yesterday’s bearish candle as the Australian data have failed to impress in the morning. The greenback has increased versus its rivals as the dollar index has increased a little after the failure to reach the 98.70 yesterday’s low.
The USDX has found temporary support below the 99.00 psychological level and now has climbed above this level again, has touched the 99.12 broken support, will increase again only if will stabilize above this level. The index is still located above a major dynamic support, a throwback is favored if will stay somewhere above the 99.00 psychological level.
The Australian CPI increased only by 0.5%, less versus the 0.6% estimate, has remained steady at 0.5% growth, the indicator has managed to stay in the positive territory for the fourth consecutive month, while the Trimmed Mean CPI increased by 0.5%, matching expectations, but wasn’t enough to save the AUD from downside.
The rate has dropped significantly today and looks unstoppable right now, is very heavy and could drop much deeper in the upcoming days. I’ve said in the yesterday’s article that we’ll have a larger drop if the rate will take out the support from the warning line (WL1) of the former ascending pitchfork.
I’ve said that he could drop much deeper if will stay below the sliding line (descending dotted line), a retest of the broken upper median line (uml) will bring us a very good selling opportunity, the next downside target will be at the 0.7382 static support, could also be attracted by the median line (ml) of the minor descending pitchfork.
The major target will be at the lower median line (lml) of the descending pitchfork, will approach this level only if the US dollar index will have enough energy to jump above the 101.00 psychological level. The dollar could increase again as the USDX is developing a Falling Wedge pattern.