FX.co ★ AUD/USD larger drop to be activated

The AUD/USD pair was trading in the red at 0.6908 at the time of writing. In the short term, it has tried to rebound but the price action invalidated a larger rebound, so more declines are in the cards.

Today, the Australian Unemployment Rate dropped unexpectedly from 3.5% to 3.4%, while the Employment Change came in at -40.9K versus 26.5K expected. On the other hand, the US Philly Fed Manufacturing Index, Unemployment Claims, and the CB Leading Index came in better than expected, thus boosting USD.

AUD/USD Strong Downside Pressure

As you can see on the H1 chart, the AUD/USD pair rebounded after registering only a false breakout below 0.6910. The rebound was only a temporary one as the price found strong resistance at the weekly S1 (0.6970).

Now, it has challenged the 0.6910 downside obstacle. A valid breakdown and a new lower low could activate more declines.

AUD/USD Forecast

After the current sell-off, AUD/USD could try to rebound again. So, only a new lower low and a valid breakdown below 0.6899 could validate a further drop and could help the sellers catch a larger sell-off.