The AUDUSD currency pair has been under pressure for some time, as repricing in the Federal Reserve’s interest rate expectations has boosted the US dollar, already trending strongly on its safe haven qualities. The risk-sensitive currency pair closed in the red for three consecutive days, with the bears not showing any signs of exhaustion. 

In Australia, retail sales came in flat on Friday, below the 0.2% consensus from the prior 0.4%. In contrast, the US reported a 229K print in initial jobless claims, lower than the 245K expectations, further boosting bets that the Fed will keep their rates higher for longer. With a disappointing Chinese recovery and continuous jitters on the US debt ceiling deal, there is a tailwind for further downside, but can the bulls resist? 

Technical 

The bears have successfully broken down the consolidation range between $0.6599 and $0.6790 on the 1D chart, as they now approach the 78.6% Fibonacci retracement level at $0.6406 from the early February peak.  

The bulls could attempt a retracement, where the Fibonacci golden ratio at $0.6565 stands in their way of retesting the breakdown point at $0.6599. However, on current fundamentals, the bears could be enticed to bounce off the consolidation support to confirm the breakdown. From there, the lower support at $0.6369 could be pivotal in the longer term. 

However, if fundamentals change on a softer PCE print in the US later today, the greenback could weaken, pushing the currency pair back within the consolidation range. The Fibonacci midpoint at the 50-day moving average around $0.6676 could come into play if the bulls gather momentum. 

Summary 

The greenback has a fundamental backing that strengthens it against its major counterparts. While the AUDUSD bulls could retest the consolidation breakdown point at $0.6599, a fundamental change could be required to resist the bulls from legging lower toward $0.6406. 

Sources: Koyfin, Tradingview