The AUD/USD has increased today and has managed to recover after the yesterday’s impressive drop, but this throwback could be only temporary because is still under major selling pressure on the short term. Could drop further if the USDX will have enough directional energy to resume the short term rebound.
The dollar index has decreased a little in the first part of the day, but now is trading in the green again, is located above the 99.50 psychological level and is somehow expected to climb much higher after the breakout above the 99.12 static resistance (support has turned into resistance). I’ve said in the yesterday’s article that we could still have a Falling Wedge pattern on the USDX, the index has found strong support at the 98.57 static support and at the downside line of the potential chart pattern. The USDX has reached new lows on Monday , but the bears have signalled an exhaustion, the behavior could change on the short term if the rate will make higher lows.
Technically the AUD/USD should drop further on the short term despite the minor rebound, maybe has come back only to test and retest the a static support area, could approach the 0.7000 psychological level if the USDX will jump again above 101.00 psychological level.
The Aussie has increased on the mixed Chinese data, the CPI rose by 1.2%, beating the 1.1% estimate and the 0.9% growth in the previous reading period, while the PPI increased by 6.4%, less versus the 6.8% estimate and versus the 7.6% growth in the previous.
The USD has received a helping hand from the Import Prices indicator, which has increased by 0.5%, more versus the 0.2% estimate and versus the 0.1% growth in the previous reporting period, the Federal Budget Balance will be released later and is expected to increase from -176.2B to 175.0B, but I don’t believe that will have a significant impact on the AUD/USD price action.

AUDUSDdaily

Price has increased, but maybe only to retest the 0.7382 broken support before will drop further, is expected to drop in the upcoming hours if the USDX will make new highs. You can see that has found strong support right above the 50% Fibonacci line (descending dotted line) and has failed to reach and retest the lower median line (lml) of the minor ascending pitchfork. Could still reach the mentioned dynamic support lines as long as is trading within the minor descending pitchfork's body, the perspective remains bearish, the major downside target remains at the median line (ML) of the major descending pitchfork. We could have a selling opportunity if the rate will escape from the minor ascending pitchfork's body, and a buying opportunity if will jump from the minor descending pitchfork and will be rejected by the lower median line (lml) of the minor ascending pitchfork.

AUDUSDh4

You can see that the rate has increased today, but has found resistance right below the 0.7382 level and now is going lower, personally I would like to see a retest of the upper median line (uml) of the minor descending pitchfork before will drop further.

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