Is there more in the bearish tank?

The AUDUSD tumbled lower after the much lower than expected CPI. The expectations were for a 0.2% gain. The QoQ change was -0.3%. The YoY fell from 1.7% to 1.3%. Going the wrong way.

The pair has moved 194 pips to the downside on the news. What next? Is there more bearishness in the tank?

Looking at the daily chart, the high on the corrective move higher stalled at 0.7834. The 38.2% of the trend down from the July 2014 high, comes in at 0.78457. The high stayed below that key target, but got within 11 pips. The high also stayed just below the June 2015 high at 0.7847. So from those perspectives, the price high stalled just ahead of those key resistance levels. Looking more closely, the recent high stalled right at a topside resistance trend line.

Those three things are bearish but also in the rear view mirror. The question becomes "What now?"

The pair has moved closer to the next key support area. That area comes in between the 0.7531-59 where there were a number of swing levels in the past and also where a lower trend line cuts across. The low today extended to 0.7570 so far.

Additional targets come in 0.7511 (the lower trend line in the chart above) and the 0.7449 level which is the 38.2% of the move up from the Jan 2015 low.

Seeing the pair is still above the 38.2% of the years corrective move higher and the CPI likely to swing the RBA back toward easing sooner rather than later, those targets seem doable going forward. In fact a move to the 50% of the years range is also possible at 0.7330.

Where would be a good level to sell? A corrective target I expect sellers to lean against would come against the 200 bar MA on the 4-hour chart. That level comes in at 0.7624 and is the level that traders can use to define risk. The price should also stay below this level on rallies.

The CPI was a game changer for this pair. That should keep the sellers in control. I would expect rallies to respect topside resistance levels as trader look to hop on a downward trend. The 200 bar MA at 0.7624 should be a ceiling for traders to lean against.... The