AUD/USD hit one-month low after bear flag breakdown
- AUD/USD fell to 0.7453 in Asia – the lowest level since May 16.
- The daily chart shows the bear flag breakdown – bearish continuation pattern.
The AUD/USD pair hit a one-month low of 0.7453 in Asia and looks set to extend losses further.
The spot closed at 0.7479 yesterday, confirming a bear flag breakdown – a bearish continuation pattern, which indicates the sell-off from the April 19 high of 0.7813 has resumed and the pair could drop to 0.7125 (target as per the measured height method) in short-run.
The AUD also looks weak from the fundamental perspective. The Fed raised rates by 25 basis points earlier this week and signaled faster rate hike path. Meanwhile, the RBA is not seen raising rates any time soon.
Thus, US-Australia bond yield differential will likely continue rising in the USD-positive manner.
AUD/USD Technical Levels
Support: 0.7412 (May 9 low), 0.7371 (May 27, 2017 low), 0.7328 (May 6, 2017 low).
Resistance: 0.7478 (session high), 0.7539 (falling/bearish 5-day moving average), 0.7584 (10-day moving average).