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AUD/USD - Price Bottom Failure

The Australian Dollar got a boost after the RBA sounded slightly less dovish in its monetary policy statement. However, the AUD/USD has not extended the bullish attempt, and is showing that bears are still in charge.

AUD/USD 4H Chart 8/11

(click to enlarge)

The 4H chart shows that AUD/USD formed a price bottom after making a low on the year at 0.7232. However, price failed to clear a previous resistance around 0.7450 and is now breaking down that price bottom formed at the end of July. Although price broke above the 100- and 50-period SMAs, it held under the 200-period SMA, and is now back below all three of them. The 0.7232 low is in sight with risk of breaking. 

Fundamental Reasoning:
Today's slide is a AUD-negative story and not a USD-strength one. As a mainly technical trader I don't focus on the "why", but its good to know the markets fundamental reasoning. In this case, despite a less dovish RBA, the prospect of the central bank turning the corner into hawkish territory is bleak, especially with China's shaky economy of late. The news that the Peoples Bank of China devalued the RMB by 1.9% also added downward pressure on the AUD (Australia has significant exports to China, and if the RMB is devalued, it will make Australia exports more expensive than before, and thus perhaps limit growth in exports). 

Last week, I would reason that buying AUD/USD on a dip is viable. This week, with technical clues that bears are still in charge, I would look to fade a rally.