The AUD/USD dropped significantly today, has touched new lows and look a little heavy on the Daily chart. The pair has fallen below two important resistance level, signaling that we had a false breakout on Friday, I’ve said in the yesterday’s article that we still have to wait for a confirmation that the price will increase further. Today’s drop could invalidate the Friday’s breakout, so the rate could decrease further in the coming days, but only if the USDX will resume the current bullish momentum.

The pair has increased in the early morning, but the sellers have stepped in again after the Reserve Bank of Australia has released the Cash Rate, the rate was maintained steady at 1.50%, matching expectations. The Cash Rate remains unchanged after August 2016 cut, RBA is expected to leave the rate unchanged in the coming period, so the Aussie could stay higher. The AUD has increased in the early morning also because was supported by the Australian AIG Construction Index, which has increased from 47.0 to 47.7 points, reaching the highest level of the last 4-months. The pair has squeezed a little in the last hours, so maybe will be better to stay away from this pair until we’ll have a fresh trading signal.

You can see that the price has decreased and now is trading again below the upper median line (UML) of the major descending pitchfork and below the lower median line (lml) of the ascending pitchfork, a retest of the mentioned resistance levels followed by a decrease will open the door for more declines.

However the current drop could be only temporary if the USDX will fail to stay above the 100.00 psychological level. Technically is somehow expected to decrease a little on the short term after the failure to reach the sliding line (descending dotted line) from above the UML. The AUD/USD will resume the upside movement only if will have enough energy to jump and to stabilize above the sliding parallel line .

If a decrease will occur, the rate could find support again at the 150% Fibonacci line (ascending dotted line) and lower at the first warning line (wl1) of the ascending pitchfork.