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AUD/USD plunged in the last hours and now is trading at 0.7226 level far below 0.7276 daily high. The price action failed to confirm an upside continuation, so a downside movement is in cards. In the short term, the currency pair is moving somehow sideways, so maybe we'll have to wait for a clear direction before taking action.
AUD/USD drops right now only because the DXY rallies. The pair climbed as much as 0.7276 today as the Aussie was lifted by better than expected Australian data. The Unemployment Rate dropped from 4.6% to 4.2% below 4.5% forecasts, while the Employment Change was reported at 64.8K above 60.0K expected.
Surprisingly or not, the AUD/USD pair drops even if the US Unemployment Claims and the Existing Home Sales reported worse than expected figures.
AUD/USD found resistance at the 50% retracement level and now it challenges the weekly pivot point (0.7224). As you can see on the H4 chart, the pair failed to stabilize above the sliding line (SL) signaling that the bulls are exhsusted and that the price could turn to the downside.
The downside sliding line (SL1) stands as a dynamic support. Only a valid breakdown below it may announce a larger downside movement. In the short term, it could extend its sideways movement. AUD/USD could develop a triangle pattern or it could print a range formation.
A new lower low, a bearish closure below 0.7169 could activate a downside movement and could bring new short opportunities.
A new higher high, jumping and closing above 0.7314 could confirm further growth towards the median line (ML).
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