The Aussie has continued to decline sharply over the month of February. It was the end of January that we saw what was a surprising rally that saw the AUD rally as high as 81 cents.

Fundamentally that was never going to be the fair market price for the Australian currency. The RBA is targeting a rate in the low 70’s and will be doing all they can to keep it that way.

However, the big driver at the time has been the USD. Which over that same period has staged a sharp turnaround. It now looks like the bottom is in place and we are going to see the Greenback appreciate. Which means more downside to come in the AUD.

Downside Target

On a purely technical level, the AUD/USD looks like it is headed to 0.7650. That’s the level that has seen the most support and resistance in the past.

Fundamentally, we also have the jobs report out of Australia and CPI from the US. Those will be the big two that will shape the week.

Any signs on positive inflation will send the US rallying. While a poor jobs report will mean rate rises in Australia are well and truly on hold for now.

At the moment I’m certainly biased to the short side with a target of 0.7650. That just so happens to be the downside target for our short forex signal.