AUDUSD was finding support at the top of the Ichimoku cloud in the past week around 0.7200. This support level failed on Wednesday and prices tumbled into the cloud and dipped below it to reach 0.7110 after Australian CPI data missed forecasts and came in lower. The intra-day bias is bearish as RSI has turned negative and fell below 50. Prices are also below the 50-day moving average.
The market has retraced just over 50% of the rise from 0.6935 to 0.7381 and stopped its fall close to the 61.8% of the Fibonacci retracement level. This level at 0.7105 is now acting as immediate support. A break below this would lead to a deeper retracement with scope to test the multi-year low of 0.6906 (September 4). Below this we would see a resumption of the downtrend that started from 0.8162 May 14. Prices would need to rise above 0.7381 in order to shift the underlying bearish bias.