The AUD/USD has plunged aggressively today and has resumed the yesterday’s bearish candle, has dropped significantly and has deleted the last day’s gains. The pair has managed to squeeze in the last hours and now is trading much above the 0.7514 today low, has increased again as the Us dollar index remains under selling pressure on the short term, the index has fallen today and has touched the 99.84 static support, a drop below this level followed by a retest will open the door for more declines. A further drop on the USDX will force the US dollar to depreciate further versus the other major currencies, so we’ll have to wait to see if we’ll have a breakdown of a bounce back from this level.
The AUD/USD maintains a bullish perspective on the short term, could increase further despite a minor drop, technically a minor drop is somehow expected after the impressive bullish run, so a correction is natural.
The Aussie has decreased sharply in the early morning as the Australian CPI has disappointed, the indicator has increased only by 0.5% in the fourth quarter, less versus the 0.7% prediction, has come also below the 0.7% growth from Q3. The Trimmed Mean CPI rose by 0.4% in Q4, less than the 0.5% estimate, has remained steady at 0.4% and has weakened the AUD, moreover the MI Leading Index has increased by 0.4% in December, has come in better than the 0.0% growth from November. We had high volatility on the AUD/USD today even if the Australian banks were closed in observance of the Australian Day.
The USD has decreased again in the afternoon, even if the United States HPI indicator has increased by 0.5% in November, beating the 0.4% estimate, has increased much also compared to the 0.3% growth from October. The US has released also the Crude Oil Inventries, but the data didn’t have any impact on the AUD/USD.

AUDUSDd-3

The price has decreased after the failure to touch the lower median line (lml) of the former ascending pitchfork, could still increase and approach the major upside target from the upper median line (UML) of the major descending pitchfork despite a minor decrease. We'll have a larger decrease again, only if the price will fail to approach and reach the mentioned resistance levels, we have a strong confluence area at the intersection between the lower median line (lml) with the upper median line (UML), this is acting as a magnet and could attract the price. The USD could take the lead and could dominate the currency market only if the USDX will bounce back, we still need to wait for a confirmation that the index has completed its corrective movement.

AUDUSDh-3

The bulls looks exhausted because the price has managed to escape from the minor ascending channel, right now is increasing and most likely will try to test the channel's downside line and could try to reach also the lower median line (lml) from the Daily chart, could decrease again if will fail to reach these levels.

2 thoughts on “AUD/USD shows exhaustion signs January 25, 2017”

  1. Daniel Chan - Forex.Today says:

    very good trade plan 🙂

  2. Olimpiu Tuns - FOREX.TODAY says:

    Thanks!!!

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