The AUD/USD pair has decreased sharply in yesterday’s trading session as the Australian economic data have come worse and have weakened the Aussie. The price has rebounded today and has recovered after the massive drop from yesterday, the pair maintains a bullish perspective on the Daily chart despite the current short retreat. I’m optimistic because the US dollar index has plunged in Asian session and could drop even lower, could reach the 93.61 swing low till the end of the week, the USDX remains under massive selling pressure as the rate has retested a major dynamic resistance level, but wasn’t able to close above this obstacle.
The price has slipped again below the upper median line (UML) of the ascending pitchfork, but has failed to retest the 50% retracement level, has failed to retest also the 50% Fibonacci line (ascending dotted line), the short retreat was somehow expected because the pair has found strong resistance right above the sliding parallel line, has also failed to reach the next upside target from 76.4% retracement level. The AUD/USD could reach the 76.4% retracement level if will continues to trade inside of the ascending channel, between the 50% Fibonacci line and the sliding line.
The price is approaching the upper median line (UML), could retest this line and could decrease again on the short term, personally I’ll prefer to see the price at the confluence formed at the intersection of the 50% retracement level with the 50% Fibonacci line (ascending dotted line) because there will be a good opportunity to go long again on this pair with stop loss right below the confluence area. The major upside target remains at the long term 50% retracement level, the pair still points to this level as long as is trading above the 50% Fibonacci line, any drop below this dynamic support could open the door for more declines, then we can say that the medium term rebound has ended.
The Aussie has decreased in yesterday’s trading hours because the Australian Consumer Price Index has dropped unexpectedly lower, the CPI has fallen by 0.2%, even if the specialist have forecasted a 0.3% increase, therefore the CPI has reached the lowest level after January 2009, the indicator didn’t fall below the 0.0% since then. The FOMC decision has weakened the USD again, so the AUD/USD has increased in the early morning, the FED has maintained the rate on hold at 0.50%, and has left the door open from an increase in June, but personally I don’t believe that the hike will come so soon. The FED continues to disappoint the currency traders, so is understandable why the USD continues to drop.
The price is challenging the upper median line (UML) right now, he could find temporary resistance at this level, the pair could become strongly bullish again if will jump again and stabilize above the 61.8% retracement level and above the upper median line (UML). The AUD/USD could increase further because the USDX edges lower and because the price has closed much above the 50% retracement level and above the 50% Fibonacci line, the perspective remains bullish as long as the price continues to move inside of the ascending channel.