Aussie dollar slumps as growing expectations for more aggressive action from Fed inflate the greenback

AUDUSD falls to seven-week low in sharp acceleration lower on Wednesday, as the US dollar continues to ride on the waves of optimism that elevated oil prices will continue to fuel inflation and prompt the Fed into policy tightening cycle.

The Aussie dollar fell over 1% until the early hours of the US session, on track for the biggest daily loss since June 23.

Violation of important supports at 0.7070 zone (converged 55/100DMAs) and 0.7050 (top of ascending daily Ichimoku cloud / 50% retracement of 0.6865/0.7237), which also completed the bearish failure swing pattern on daily chart, generating bearish signal that increases prospects for further losses.

Bears eye targets at 0.7016 (200DMA); 0.7007 Fibo 61.8%) and 0.7000 (psychological / daily cloud base), as predominantly bearish daily studies support scenario (falling daily Tenkan/Kijun-sen are diverging after formation of bear-cross and negative momentum is strengthening).

Firm break of pivotal 0.7000 support zone would further weaken near-term structure, while broken supports at 0.7070/0.7100 zone reverted to resistances which should keep the upside protected.

Res: 0.7050; 0.7070; 0.7100; 0.7119
Sup: 0.7016; 0.7000; 0.6953; 0.6922