The bearish momentum in the AUD/USD price paused by the 0.7300 psychological level. Now it is trading higher at 0.7351 level versus 0.7289 today’s low. The further short-term decline in the DXY could lift the pair.
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Surprisingly or not, the Australian Dollar increased even if the Australian Retail Sales print worse than expected. The indicator registered a 1.8% drop versus 0.7% expected and 0.4% growth in the last reporting period.
DXY technical analysis
Technically, the Dollar Index has shown some overbought signs lately after developing the rising wedge pattern. The index has reached the upside line again, and now it goes down. Its failure to stay above the weekly R1 (92.99) signaled that the DXY is overbought.
Still, the drop could be only temporary as long as it stays above the uptrend line pattern’s support. The 78.6% (92.72) retracement level is seen as static support. Though, closing below 92.84 could signal a potential drop towards the up trendline.
AUD/USD price technical analysis: Key levels to watch
The AUD/USD price failed to stabilize under the descending pitchfork’s lower median line (LML), signaling exhausted sellers. Therefore, the lower median line (LML) represented a downside target. Also, the pair has registered only a false breakdown with great separation through the 0.7300 psychological level.
The price challenges the weekly S1 (0.7355) level, which acts as static resistance. Technically, it’s hard to believe that the AUD/USD pair could develop a broader growth without coming back down to test and retest the support levels.
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Personally, I would like to see a temporary sideways movement in the short term. The pair has jumped only because the DXY has plunged down. Better than expected US data due till the end of the week could send the pair down again.
The pair could find resistance at the downside 50% Fibonacci line of the descending pitchfork. Only a major bullish pattern could really announce a bullish reversal.
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