The currency pair dropped sharply today and it seems poised to resume the downward movement, this scenario will take shape only if the USDX will resume the bullish movement. Price is trading near a very strong support area, so only a valid breakdown will confirm a further drop.
AUD/USD moves in range on the short term and it was expected to climb higher on the short term after the false breakdown from the minor range. Technically, the current drop could be only temporary, it could increase again if the USDX will slip lower.
The USDX is trading below the 93.81 static resistance, but maintains a bullish bias on the short term despite the yesterday’s drop. The USD will dominate the currency market if the USDX will have enough directional energy to jump and stabilize above the 93.81 upside obstacle.
Price drops aggressively and tries to breakdown below the median line (ml) of the minor descending pitchfork and below the 38.2% retracement level. It was expected to try to climb towards the upper median line (uml) of the descending pitchfork, but a further increase will be invalidated if will close below the median line (ml).
A drop towards the next major downside target (WL1) will be confirmed after a retest of the median line (ml). Technically, it should approach and reach the lower median line (lml) of the minor descending pitchfork. This scenario will take shape only if the USDX will jump much above the 93.81 obstacle.
