- AUD/USD bears stepping in ahead of Retail Sales.
- Bears are seeking a downside daily extension to test below 0.72 the figure and beyond.
AUD/USD has started to test the W-formation's neckline in the build-up to the Retail Sales data that will be released within the coming hour.
Should the neckline hold, there will be prospects of an upside continuation should the data surprise as more robust than forecast.
AUD/USD hourly chart
As illustrated, the price has made a 50% mean reversion to the neckline of the formation. This would be expected to hold into the data today.
On a break of there, however, the downside will be in play.
AUD/USD daily chart
From a daily perspective, following the 61.8% Fibonacci retracement, the price is resisted below the 21-day moving average and bears will be looking for a downside extension of the daily bearish impulse.
The dynamic trendline support will first need to give and on a retest, bears could well be encouraged to move in.
The -272% Fibonacci retracement level of the correction comes in near 0.7190. Thereafter, 0.7160 will be pressured at the -61.8% that has a confluence with the 20 Aug highs.
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