The pair retests the broken dynamic support and it seems heavy enough to drop deeper in the short term. It is trading at 0.7279 below 0.7305 which is Friday's high but I believe that only a drop somewhere below the 0.72 psychological level could really suggest selling.
AUD/USD has shown exhaustion, overbought signs, lately, but we still need a strong confirmation before going short. Another lower low could bring a short opportunity.
You can notice that the price has escaped from the ascending pitchfork's body. Now, it has come back to retest the lower median line (LML) signaling that the reversal could take shape. Technically, only drop and stabilization below the S1 (0.7208) should validate a larger corrective phase, decline.
AUD/USD is trading within a down channel, so the short-term bias is bearish as long as the price stays inside of this pattern.
- AUD/USD Trading Tips
Sell another lower low, a drop below 0.7191 level, or a valid breakdown below the S1 at 0.7208. The down channel's support is seen as a potential downside target. The S3 (0.7075) and the 61.8% retracement level could be used as targets as well.
Buy a bullish closure above the R1 (0.7341) level with an upside target at the median line (ML), around the R3 (0.7473) level.
