The Australian dollar (AUDUSD) broke below a significant level last week on the back of a stronger US dollar.
Check out today’s analysis for the latest, including key AUDUSD levels, targets, and the latest on the US Dollar Index (DXY).
Let’s get started!
Last week, the US dollar rocketed higher on hot Consumer Price Index (CPI) figures, tensions in the Middle East, and surging bond yields.
That left most of the major currency pairs in breakout territory.
For AUDUSD, the currency pair broke a significant weekly level.
The 0.6512 level has served as a weekly pivot for AUDUSD since last May.
We also saw the bullish breakout from AUDUSD on April 8th fail on the 10th, confirming a failed breakout (fakeout).
As you may know, a fakeout of a key level or pattern often triggers an extended move in the opposite direction.
That could mean a 230-pip drop to the October lows at 0.6285 for the Australian dollar.
That makes sense, given the range we’ve witnessed since last June.
However, AUDUSD may still want to test 0.6512 or thereabouts before sellers are ready to step in and drive the pair lower.
We have yet to see a full retest of the 0.6500-0.6512 region, so keep that in mind if you decide to trade the pair.
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