The AUD/USD has reached fresh new lows today and could drop even deeper till the end of the day if the United States economic data will come in line with expectations, the pair has managed to decrease below Tuesday’s low and now is expected to resume the corrective phase. The pair has started a broader corrective phase after the last impressive bullish run, the price has slipped again inside the extended sideways movement, unfortunately the price has failed to consolidate higher, has lost bullish momentum, was expected to decrease because the US dollar index has found strong support and then has edged higher.
The Aussie has decrease sharply after the Reserve Bank of Australia has cut the interest rate from 2.00% to 1.75%, moreover the RBA have left the door open for further cut is necessary, remains to see what will happen after the US will release the economic data, the Retail Sales may decrease again by 0.3%, while the Core Retail Sales could increase by 0.6% in April, much higher compared to the 0.2% in March, the Core Retail Sales could Reach the highest level after June 2015 and could help the greenback to increase further.
The Producer Price Index could increase by 0.3% in April, higher compared to the 0.15 drop from March, moreover the Core PPI could jump higher by 0.1%, exceeding the 0.1% drop from March. The US dollar could edge higher versus all its rivals today if the data will come as expected or much better, the Prelim UoM Consumer Sentiment could increase from 89.0 to 89.9 points in May and could boost the greenback, the US dollar index could finally start a broader rebound on the short to medium term.
You can see on the Daily chart how the price has broken down the median line (ML) of the ascending pitchfork, has also broken below the 0.7382 horizontal support, the pair come to retest the broken support level and now is heading lower with target at the lower median line of the ascending pitchfork. We had a strong confluence area at the intersection of the median line (ML) with the 0.7382 level, the price has retested this broken area and now is expected to accelerate the decline, has slipped below the 0.7299 horizontal support and now is challenging the minor support from the sliding parallel line (descending dotted line). The AUD/USD has decreased again below the lower median lien of the descending pitchfork, he could retest the lower median line before will resume the downward movement.
The current retreat was expected because the price has failed to stabilize above the upper median line of the ascending pitchfork, has failed to retest the upper median line and then was attracted by the confluence area.
The price is pressuring the sliding parallel line, could bounce on the short term if the dynamic support will hold, but any drop below this line will attract more sellers, personally I’m expecting to see a 0.7299 retest before the price will resume the downward movement. The AUD/USD is on a declining path, the outlook remains bearish on the short term even if the price will jump again above the lower median line (lml) of the descending pitchfork.