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AUDUSD Crashes Through Support, Targets 0.7380

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AUDUSD continues to lose ground following a dismal trade balance figure and a more dovish tone out of the RBA. The pair is currently down more than 80 pips from session highs and has just breached trend line support on a 4-hour closing basis.

The level that extends from the March 16th low had previously held as support on three separate occasions. Today’s intraday break is a sign that bids are starting to dry up, thus making a retest of the 0.7380 handle the likely path forward.

I mentioned this area of support two weekends ago as one to watch due to the confluence of critical levels. The daily chart below illustrates the significance of this area.

AUDUSD key support area on the daily chart

With the break of trend line support now behind us, a retest of this level as new resistance could offer a favorable opportunity to get short. The target for a move lower is, of course, the 0.7380 handle.

As for upcoming event risk, things look pretty light for the Australian dollar with a few scheduled events for the US dollar including ISM non-manufacturing PMI today at 10 am EST. A more notable event, however, could be Janet Yellen’s speech this Thursday at 5:30 pm EST.

But all things being equal, the technicals for AUDUSD point to further losses toward the confluence of support at 0.7380.

Want to see how we are trading this setup? Click here to get lifetime access.

AUDUSD key technical break on the 4-hour chart

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