Forex Video Briefing (10/28) – AUD/USD Breaks Triangle

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[videojs mp4=”http://s3.amazonaws.com/fxcom-amazon-s3/2014/10/TrianglePattern1.mp4″]

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.

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Jonathan Millet is currently the proud CEO of ForexMinute.com, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers. He also holds the position of Binary Options Consultant at ForexMinute.com. Before ForexMinute.com was around, Jonathan was a successful Forex dealer and chief market analyst at Forexyard. He has also worked as a Forex trader. His other specialties include advising financial companies of how to stay head of the competition.