Once we took out the 0.7150 level that had been supporting the AUD/USD for a week or so we were definitely off and racing and after a brief pause at 0.7050 we fell some more til the 0.6950 level provided solid support. From here, the 0.7050 level should now be seen as the first decent level of resistance and should see sellers lining up ahead of it with stops placed above.
On the daily chart you will notice the 50 and 100 DMA’s coming in at 0.6760 which is also in the same ballpark as the early April lows and is my next target for the AUD/USD. Just in case we don’t already have enough technical negatives for the AUD/USD, we should also remember that we have broken a bull channel and failed at the 200 DMA as well and theoretically we could make it all the way back to revisit sub 0.6500 levels.
As for what to do with this information. I would be covering my shorts at current levels and looking to resell at 0.7040 and 0.7090 with stops left above 0.7150. It also worth pointing out that the 5 DMA has crossed back below the 15 DMA which is not a good sign for those looking for the AUD/USD to bounce back in a hurry. Also, a look at the weekly tech studies that are all turning down from overbought levels should make those that are looking for a quick move higher rethink their game plans.
