The strength meter suggests the AUDUSD could move higher, but will the price break resistance?
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The Federal Reserve is set to hike rates by 75bps, but will the move already be priced in. When leading up to major events, the price can often move ahead of the announcement, because this is seen as a guarantee. When the event is announced the price can then move in the opposite direction of what is expected. This could see the USD weaken giving opportunity to markets such as the AUDUSD for a move higher.
The strength meter shows the USD weakening after reaching the reversal zone. The AUD was the strongest currency of last week which suggests we should be looking for long opportunities in this market.
Looking at the Monthly chart first we can see that the price is forming a bullish reversal candle, after rejecting the major swing lows. This price action could see the price head higher, going down to the weekly time frame we can see that the price has formed a strong bullish close. This close also points more towards an upward move. However, we do have a strong trendline resistance forming where the price is now. If the price declines here, we could see a move lower. This move however, could be short lived as the price could form a higher low, leading to a bullish breakout of the resistance.
Did you see our Week Ahead Analysis? You can see it here.
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