The AUD/USD has finally cracked a key support area today and at the time of this writing the pair was still trading near the day’s low, suggesting strong selling pressure.
As can be seen from the chart, the Aussie has cleared the 0.7475-0.7500 support area at the fourth time of asking. This level had been previously resistance.
The breakdown will likely lead to further technical follow-up selling in the days to come.
As a result, the Aussie may descend towards the Fibonacci retracement levels at 0.7385 (61.8%) and possibly 0.7285 (78.6%) next. There’s also a bullish trend line coming into play around the 0.73 handle, which may also provide some support.
However, in the event that the Aussie reclaims the broken 0.75 handle, ideally on daily closing basis, then this breakdown would be considered a false move. In this potential scenario, we could see the unit head back towards the top of its range around 0.7700-0.7750.
But as things stand, this is not our base case scenario as we are expecting to see a break down now.
Source: eSignal and FOREX.com