AUD/USD is currently trading inside a consolidation pattern on its intraday time frame, as the pair has formed higher lows and slightly higher highs. This created an AUD/USD rising wedge, with the pair just testing the top of the range, just around the .9150 minor psychological resistance.
Stochastic is moving down from the overbought zone, indicating that Aussie bears are in control at the moment. The pair could sell off until the next support zone, right around the rising trend line of the wedge.
There have been no major reports released from Australia today but the weakening risk appetite could keep this pair inside the consolidation pattern in the meantime. At the same time, weak data from China could keep AUD/USD’s gains at bay. As for the US dollar, the Fed’s commitment to carry on with its taper and Yellen’s hint at a rate hike six months after asset purchases are over could keep the dollar supported.
AUD/USD Technical Forecast
A breakout in either direction will take place only if there’s a significant fundamental catalyst, which doesn’t seem to be present this week. For today, the US is set to print its CB consumer confidence report and possibly show higher optimism. If that’s the case, the US dollar could get another strong boost and AUD/USD could make its way back down to the formation support.
Shorting at market with a stop above the range resistance or .9150 could yield a good return-on-risk if one aims for the bottom of the wedge around .9050. If you’re bullish on AUD/USD, you can wait for the test of the bottom of the range and a bounce back to the top.
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