AUD/USD Extends Decline, Dollar Gains Momentum

Key Highlights

  • AUD/USD extended its decline below the 0.7300 support zone.

  • It broke a major contracting triangle at 0.7325 on the 4-hours chart.

  • EUR/USD is now trading well below 1.1800, and GBP/USD broke the 1.3800 support.

  • USD/CAD could continue to rise above the 1.2650 resistance zone.

AUD/USD Technical Analysis

The Aussie Dollar started a major decline from well above 0.7350 against the US Dollar. USD/CAD traded below the 0.7300 support to move into a bearish zone.

Looking at the 4-hours chart, there was a break below a major contracting triangle at 0.7325. The pair settled well below the 0.7300 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair gained pace below the 0.7250 support level. The next major support is near the 0.7200 level, below which there is a risk of a larger decline. On the upside, an initial resistance is near the 0.7265 level. The main resistance is now forming near the 0.7300 level (the recent breakdown zone). A close above the 0.7300 level might open the doors for a fresh increase.

Looking at EUR/USD, the pair traded below the 1.1750 support and it remains at a risk of more losses. Similarly, GBP/USD might extend losses below the 1.3700 level.

Economic Releases

  • US Initial Jobless Claims – Forecast 363K, versus 375K previous.

  • Canada’s ADP Employment Change for July 2021 – Forecast -250K, versus -294.2K previous.

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