The AUD/USD has staged a recovery on the day, gaining 0.35% as the greenback’s progress against major currencies stalls in the aftermath of the FOMC’s 75 basis points rate hike.
The AUD/USD had closed the day 0.91% lower after the USD bulls continued to push the strength of the greenback following the Fed’s decision to hike rates by 75 bps. This momentum carried on into the new trading session but lost steam during the London session as USD bulls exit their positions in profit. This has led to a pullback on the AUD/USD, with the commodity dollar now gaining traction ahead of the NY trading session.
From the technical analysis standpoint, there is a descending trendline that connects the lows of price action for 2022. The integrity of this trendline could determine if the AUD/USD can pull off from session lows or if the downtrend will continue. Presently, the daily candle is evolving into a pinbar. The close of the day will show whether the candle remains as it is, which could provide information as to subsequent price action.
AUD/USD Forecast
The 0.66170 support level has so far held firm after the intraday downside violation was rejected off the descending trendline. A push to the upside targets 0.66842 (14 July 2022 low), now acting as a resistance. A break above this level extends the correction to 0.67664 (1 July low and 15 September high). 0.68719 (23 June and 5 August lows) and 0.69848 (26 July high) are additional targets to the north, which could become new areas to sell on an extension of the retracement rally.
On the flip side, a breakdown of the 0.66170 support and the descending trendline connecting the 2022 lows opens the pathway for the bears to push toward 0.65157 (22 May 2020 low). If the bulls fail to defend this pivot, the 0.64075 support (15 May 2020 low) becomes the new downside target.
AUD/USD: Daily Chart
