The currency pair decreased today, but continues to stay above a major downside target. It remains to see what will happen in the upcoming days because a USDX’s further increased will send the AUD/USD much lower.

The Dollar index is pressuring a major resistance area, so only a valid breakout will confirm a further increase and a USD’s dominance. The AUD/USD remains under massive selling pressure on the short term despite the minor rebound.

Right now is very important to see what will happen on the USDX because another decrease will weaken the USD, which will drop versus all its rivals after the important upside movement.

The Aussie was punished by the Australian Retail Sales in the morning, which have increased only by 0.0%, less versus the 0.2% estimate and versus the 0.6% growth in the former reading period. The Chinese economic data have come in mixed today, the Trade Balance was reported at 183B, below the 187B estimate, while the USD-Denominated Trade Balance was reported at 28.8B, much higher versus the 27.5B estimate and after the -5.0B in the former reading period.

The Annual Budget Release will be published later. The US data could bring more action on the AUD/USD as well.

The rate dropped significantly today and has resumed the yesterday’s bearish candle. It is trading in the red and is located below the median line (ML) of the major black descending pitchfork. Price has retested the first warning line (wl1) of the minor descending pitchfork.

I’ve told you in the last weeks that a valid breakdown below the median line (ML) will confirm a further drop at least till the upper median line (uml) of the minor descending pitchfork. Technically, it is somehow expected to drop further and to stabilize below the ML as the USDX seems determined to take out the near term resistance level and should increase further which will push the USD much higher versus all its rivals.