AUD/USD just inches away from 0.7000, things looking dicey

Amid the more bullish dollar post-Fed, the drop towards 0.7000 now was one that was coming since yesterday as pointed out here.

As things stand, this marks a critical point for AUD/USD from a technical and psychological perspective.

The pair has held a defense at 0.7000 on several occasions previously, with the latest coming in December last year. But the bounce was rather shallow as sellers leaned on the 100-day moving average (red line) to drag the pair down again.

Considering the dollar backdrop at the moment and the divergence between the RBA and Fed policies, a technical break below 0.7000 and close below that could spell much more danger for AUD/USD on the way down.

Looking at the chart above, there is very little stopping a drop towards the 50.0 retracement level @ 0.6757 next potentially (though one can argue for some minor support @ 0.6800 first).