Forex Video Briefing (10/28) – AUD/USD Breaks Triangle
The 4H chart shows the consolidation then the triangle congestion. Last week, we saw a brief attempt to break below 0.8750 and the triangle support. However, since then, price has rallied, and the false break down evolved into a bullish breakout.
Price is above the triangle and the 200-, 100-, and 50-period SMAs in the 4H chart, the RSI is pushing toward 70, above which we can say there is bullish momentum in this time- frame. Ahead of tomorrow’s FOMC meeting, AUD/USD looks poised to test the 0.8895-0.89 area, but we will have to wait until after the event risk to assess whether AUD/USD is creating a price bottom out of October’s consolidation. A break above 0.89 should initiate the bullish correction scenario.
However, if price returns back below 0.88, the bullish outlook might need to be shelved. A break below 0.8750 would be a strong indication of bearish continuation, with the 0.8642 low in sight, and with risk of further downside.