AUDUSD recently fell through support at the .7225 area and dipped to a low of .7170. Price looks ready for a correction to the broken support from here.

Applying the Fibonacci retracement tool shows that the area of interest lines up with the 38.2% level. A larger correction could reach the 50% Fib at .7240 or the 61.8% Fib at .7257 that lines up with the moving averages.

The 100 SMA appears to be crossing below the 200 SMA to confirm a pickup in bearish momentum.

However, stochastic is just starting to pull up from the overbought zone to indicate a return in buying pressure. RSI is also heading higher, so price could follow suit while buyers are in control. This could keep the correction going until overbought conditions are met.

The Aussie could be in for more downside, as economic data from China turned out mixed. The official manufacturing PMI slid from 50.1 to 49.6 to reflect a contraction in activity while the non-manufacturing PMI improved from 47.5 to 53.2 to signal expansion.

Data from Australia turned out strong, though, with the building approvals and private sector credit reports beating expectations.

As for the US dollar, speculations about tapering in November and a rate hike in mid-2022 are keeping the currency supported.

Another speech by Fed head Powell is coming up, and upbeat remarks might be enough to keep the Greenback on its bullish trajectory. FOMC member Williams is also due to give a speech later today, followed by other committee members Bostic and Evans.

Before the week comes to a close, the core PCE price index is due and this would likely have a strong impact on the US currency. After all, this figure is said to be the Fed’s preferred inflation measure, so the results could influence tightening expectations.

Also, profit-taking at the end of the quarter is expected, possibly resulting to additional volatility across the board.