AUD/USD seems undecided in the short-term but most likely we'll have high action in the US session when the FOMC could shake the markets. The FED is expected to maintain its policy after today's meeting.
Still, the FOMC Economic Projections and Jerome Powell's conference could bring high volatility and sharp movements on the major currency pairs. USDX needs a bullish spark to be able to resume its bullish reversal. So, USDX's growth should force the USD to appreciate versus its rivals. This scenario could activate a major reversal pattern on AUD/USD.
AUD/USD Corrective Phase Favored!
As you can see on the H4 chart, the pair dropped below the uptrend line, it has retested it and now is traded right on the Pivot Point (0.7725) level. AUD/USD has come back from the 38.2% retracement level to retest the 23.6% level and the descending pitchfork's median line (ML).
The price action indicates a potential Head & Shoulders reversal pattern. Dropping and stabilizing below the neckline validates this formation and could indicate a larger corrective phase.
Forecast & Tips!
AUD/USD could increase further if it comes back above the 0.78 level. The pressure remains high as long as it trades below the descending pitchfork's median line (ML). A new false breakout above this line or a major bearish engulfing could offer us a first bearish signal.
Dropping below the pivot point and under 0.77 could signal a drop at least till the neckline. We may have a great selling opportunity if the price drops and stabilizes under the neckline and below the 38.2% retracement level. Such a breakdown activates the H&S reversal pattern.
