16 Dec 2015

AUD/USD SET-UP FOR FED RATE DECISION

AUD/USD DAILY

The rate has formed a head and shoulders platform at the larger symmetrical triangle resistance. With the Fed rate decision later tonight and a rate hike expected there's a large probability that the market sentiment will turn to ''risk off''', therefore, drawing the support from the historically ''high yielding'' currencies like AUD and NZD.

A break below 0.7160 would work as an early indication about the symmetrical triangle break and a move towards the the 0.7010 support. A Daily close below this level is needed for the confirmation that the broader downtrend is ready to resume though.

As the market has already priced in  the tonight's rate hike a lot, traders will pay extra attention to the path of the future hikes and dissapointing (read dovish) information may counterintuitively drive the dollar price down, so a break above 0.7400 figure on AUD/USD would indicate a deeper retracement higher and a make a move towards the major psychological 0.8000 level more likely.





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