Price plunges and seems unstoppable, even if the USDX has decreased as well. AUD/USD dropped further and has invalidated a potential Falling Wedge pattern. The pair is almost to reach a very strong dynamic support, it remains to see how it will react.

Technically, it was expected to drop further after the failure to reach and retest some dynamic resistance lines.

The Australian NAB Business Confidence was reported at 4 points versus 7 points in the former reading period. The USD was helped by the Final Wholesale Inventories increased by 0.6%, less versus the 0.7% estimate and versus the 0.7% growth in the former reading period, while the JOLTS Job Openings indicator was reported at 6.94M, higher versus the 6.68M estimate and compared to the 6.82M in the previous reporting period.

The dollar index has managed to increase today, but we still need a confirmation that the rate will jump much higher.  USDX seems undecided on the Daily chart, so, technically, it could still increase as long as it stays above the inside sliding line (sl). A valid breakdown below the sliding line (sl) it will open the door for a further drop.

AUD/USD has managed to make an aggressive breakdown through the median line (ML) of the descending pitchfork and now it was almost to reach the inside sliding line (sl), which it represents a very strong dynamic support.

You can see that the rate it has invalidated the potential Falling Wedge. I’ve told you in the previous weeks that the pair could drop further after the failure to reach and retest the upside 50% Fibonacci line of the descending pitchfork and the downtrend line (upside line of the potential Falling Wedge).

Maybe the rate will test and retest the broken median line (ML) before will resume the downside movement. A false breakout above the ML followed by a significant drop will give you the chance to go short as well.  Support can be found at the 0.7031 – 0.7016 area or lower at the downside 50% Fibonacci line of the descending pitchfork.