Forex Technical Update
Pause Ahead of FOMC:
- The AUD/USD market fell through 1.0440, 1.0200, and also tagged 1.0 in one fell swoop.
- Here at parity, the Aussie is taking a break, especially with the FOMC announcement at 2:15PM EDT.
- A retracement of 50% can bring the AUD/USD back to 1.05.
- If the reaction after the FOMC announcement causes a break above 1.0650 would make the bearish outlook would not be as strong, and a more choppy ranging market would be suggested, although the bearish bias may still remain.
Major Bearish Signals:
- The double top was a strong bearish signal, but the market has already resolved the bearish intent there.
- There is a break below the 200SMA.
- The RSI broke below 30 establishing bearish momentum in the medium term. If it can stay below 50, we are in a strong downtrend. If the RSI breaks above 60 however, the market is likely to be flattening.
- If the AUD/USD can close below 1.0 in the US session after the FOMC announcement, it is likely to be falling towards the 2011-low near 0.97.