AUD/USD drops below 1-hr 100-MA as RBA’s Debelle talks dovish, eyes double top breakdown

AUD/USD fell below 1-hr 100-MA level of 0.79 after RBA’s Guy Debelle talked dovish. The AU-US 10-year bond yield spread has dropped to 44 basis points from the day high of 47 basis points. 

Double top breakdown

The 1-hour chart shows a double top breakdown (bearish reversal pattern). The current hourly candle has breached the neckline support of 0.7897. 

The fact that the neutral rate was discussed at the July meeting led to a sharp rally in the AUD/USD, however, Debelle advised markets not to draw any hawkish conclusions from the same. He added further that Aussie rates do not have to track global rates higher. 

Thus, the AUD is being offered across the board. The decline adds credence to the indecision in the AUD market as suggested by Thursday’s Doji candle. 

AUD/USD Technical Levels

The spot currently trades at 0.7875 levels. The 1-hour RSI is oversold, while the daily RSI is turning lower from the overbought territory. A much awaited technical pullback is unfolding in the Asian session. 

A strong support is seen around 0.7830 levels (0.7831 - 23.6% Fib R of 2011 high - 2016 low & 0.7829 - 38.2% Fib R of July rally). If breached, the 10-DMA level of 0.7798 and 0.7779 (50% Fib R of July rally) could be put to test. 

On the higher side, 0.7897 (double top neckline hurdle) could offer resistance, which if breached could yield a re-test of 0.7937 (1-hr 50-MA) and 0.7969 (overnight highs).