Daily Price Action

AUDUSD Coils Ahead of FOMC


As we all know, FOMC is not an event to be trifled with. The internet is filled with war stories about how this single event has caused some serious damage to trading accounts. As such I always prefer to stand aside until the market has closed before making any considerations.

Because it’s such a volatile event, markets have a tendency to coil, or consolidate, ahead of the statement. In the case of tomorrow’s FOMC that statement will begin at 2pm EST.

One pair I’m keeping a close eye on heading into tomorrow is AUDUSD. After a 560 pip decline that began on May 14th, the pair has spent the first half of June consolidating into a wedge pattern that is best seen on the 4 hour chart.

Although a pattern such as this is typically viewed as a continuation pattern, something tells me that this may very well break to the upside. But as always it’s important to wait for the break before considering an entry and this pattern is no exception; especially true given the potential for increased volatility over the next 24 hours.

Summary: Wait for a 4 hour close beyond wedge support or resistance and then look to trade in the direction of the break. Key support comes in at .7600 while key resistance can be found at .7890.

AUDUSD wedge pattern on the 4 hour time frame

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