AUD/USD dropped significantly in the morning and reached new lows. It seems poised to start a corrective phase, but is premature to talk about this because is still trapped above some important support levels. Price dropped even if the dollar index is trading in the red again. The USDX slipped lower after the yesterday’s impressive rally.

Technically, the AUD/USD showed some exhaustion signs, it seems too overbought to climb much higher. Personally, I hope that we’ll have a bearish signal in the upcoming days, right now will be better to stay away because we don’t have any trading opportunity.

Price is still located in the green territory, has come down to retest a major dynamic support, only a valid breakdown will open the door for more declines in the upcoming period.

The AUD was punished a little also by the Australian NAB Business Confidence, which has dropped from 12 to 5 points in August, the indicator has reached the lowest level since December 2016.

It seems like that the USDX is developing a Falling Wedge pattern on the Daily chart, but we should wait for a confirmation to be sure that the USD will increase further.

The Friday’s spike has signaled that we may have another leg lower in the upcoming period. This scenario will take shape only if we’ll have a valid breakdown below the upper median line (UML) of the blue ascending pitchfork. Has failed to close near the outside sliding line (SL), meaning that the bears have stepped in again. AUD/USD is located right below the upper median line (UML) of the major black descending pitchfork, now is trying to retest it. A rejection from the upper median line (UML) will signal a drop at least till will hit the lower median line of the black ascending pitchfork.

The perspective remains bullish as long as the rate is trading above the upper median line (UML) of the blue ascending pitchfork. Is very important to see what will happen on the USDX in the upcoming days because the AUD/USD is somehow expected to drop after the failure to reach and retest the median line (ml) of the black ascending pitchfork.