The currency pair increased significantly in the yesterday’s trading session and failed once again to reach and retest a major dynamic support level.  Price is narrowing on the short term, but it could start a larger move very soon, remains to see if this will be an accumulation or a distribution movement.  Technically the bears seem exhausted and could lose significant ground in the upcoming period, but only if the dollar index will start a real corrective phase after the upside movement.

The dollar index dropped significant today and resumed the yesterday’s bearish candle. USDX is very close to reach a crucial dynamic support, a breakdown will signal a further drop in the upcoming period. Actually, a drop below the 94.30 will confirm that the USDX could drop much below the 94.00 psychological level.

AUD/USD looks undecided right now, but the US data could bring it to life. The Unemployment Claims could increase from 229K to 232K in the former week, while the Final Wholesale Inventories could increase by 0.3%. The Aussie increased in the morning after the good Chinese data, the CPI surged by 1.9%  in October, beating the 1.8% estimate and the 1.6% growth in the former reading period, while the PPI increased by 6.9%, more versus the 6.6% estimate.

Price increased a little today, but failed to reach the 50% retracement level, so it could slip lower again before will have enough directional energy to start a bullish momentum. Technically, it could climb much higher after the failure to reach and retest the median line (ML) of the major black descending pitchfork and the 61.8% retracement level. Price will breakout above the median line (ml) of the minor descending pitchfork if will reach it. However, a failure to reach the median line (ml) will send the rate tumbling towards the lower median line (LML) of the major blue ascending pitchfork, where he could find support again.

The bias remains bearish as long as the rate is trading below the median line (ml) of the descending pitchfork.