The AUDUSD fell sharply yesterday on the back of the higher CPI data. The move to the downside continued in a choppy fashion today with the price low reaching 0.67043. That was just above the earlier September lows at 0.66984. The low price for the year came back in July at 0.6681. That level also remains a key target to get to and through if the sellers are to continue their downside onslaught.
The run lower today was able to hold those key low targets, however.
Looking at the daily chart, in addition to testing the 2022 lows, the pair tested the high of a swing area from 2020 between 0.6660 to 0.6681 (green circles in the chart above).
Gettting below the 0.6660 to 0.6681 area would open the door for more downside momentum. PS the pandemic low reached all the way down to 0.55078. That is still a ways away (and may not ever be approached).
The bounce today has pushed the pair back toward the midpoint of the 2020 to 2021 trading range. That level comes in at 0.6756. The high price today reached to 0.6759 in the current hourly bar, but there is some back off on the first test (trades at 0.6751 currently). A move above that 0.6756 with momentum, would be a step in the upside direction especially given the successful test of the lows.
Drilling to the hourly chart, the up and down consolidation today is evident. The next target above the 50% on the daily (at 0.67568) would have traders eyeing the swing lows from September 1 and September 2 at 0.6771. On September 7 and September 8 the rally stalled near that area as well (see red numbered circles).
Yesterday there was a brief stall at that level before breaking lower (red circle 6 an 7 in the chart below).
Move above that 0.6771 level, and the 200 hour MA at 0.67906 would be eyed followed by the 100 hour MA at 0.68135. Breaks above those would increase the bullish bias more.
Fundamentally, the Australian employment report will be released in the new trading day. The expectations is for a rise of 35.5K after a decline of -40.9 last month. The unemployment rate is expected at 3.4% which is historic lows for that measure. The RBA of Australia raised rates by 50BP last week. IT was the 4th consecutive 50 basis point hike with expectation for more hikes ahead (data dependent though).