Forex Video Briefing (9/16) – AUD/USD and AUD/JPY after RBA Minutes
AUD/USD is holding at a 6 month low after finding support at 0.8983 this week. The market failed to break above 0.9050, and the reaction after the RBA minutes eventually pulled the AUD/USD lower. However, we are seeing support again above 0.8983, giving the pair a double bottom attempt. Price will need to clear above 0.9050, and the 1H RSI will need to break above 60 if there is to be a price bottom. Then, we need to see price hold above 0.9020 to show respect of the bottom in order to confirm a bullish correction mode. We need to test this scenario against tomorrow’s reaction to the FOMC statement and press conference, which is likely to add volatility to USD-crosses. At that point, forget about the 0.9020 level to help price find a bottom – If price can hold above 0.8983 after the FOMC event risk, we can still anticipate consolidation or bullish correction for the AUD/USD.
When we look at the AUD/JPY, we also see a double bottom attempt after the reaction to the RBA minutes. Price will have to break above 96.90 to complete the double bottom. And the RSI should also push above 60 in order to show loss of bearish momentum. We can say the next resistance is 97.26, but what is the bigger picture? Well, if price does form a double bottom, the market is basically respecting the highs from a multi-month consolidation as support. We can see in the daily chart that price broke above that multi-month consolidation in August. If price can push above 97.00, we might be looking at a bullish continuation, or at least a retest of the current highs around 98.60-70.