AUDUSD was moving inside an ascending channel on its 4-hour time frame before price made a break below support to indicate that the uptrend is over. A long red candle closed below the .7600 major psychological support, possibly putting price on track towards the next floor at .7500 then .7400.

The 100 SMA is still above the 200 SMA, though, so the path of least resistance is to the upside. However, AUDUSD already closed below the 200 SMA so a downward crossover may be seen soon, indicating that sellers are taking control of price action.

Stochastic is pointing down, also showing that bearish pressure is in play. This indicator is already nearing the oversold zone so a bit of profit-taking might happen, likely causing a pullback to the broken channel support at .7600 before resuming its slide.

Fed Chairperson Yellen’s testimony during the Jackson Hole Symposium was the main catalyst for the dollar rally, as she gave hawkish remarks and confirmed that a rate hike might still be in play before the end of this year. These upbeat remarks were echoed by Fed official Fischer, leading market watchers to price in a possible hike by December this year.

Event risks for this trade this week include the NFP report, as stronger than expected jobs figures could underscore the stronger chances of a Fed rate hike soon. On the other hand, weaker than expected results could bring doubts about tightening once more, forcing the dollar to return its recent gains. With that, the leading jobs indicators such as the ADP report and the ISM PMI readings could also spur strong moves for the dollar.

As for the Aussie, the retail sales report is due this week, along with PMI readings from China. Indications of a slowdown could put more weight on the Aussie, especially since traders are already turning their attention to weaker property figures from China.