AUDUSD is trending lower on its 4-hour time frame and is currently on its way to the resistance. Applying the Fib retracement tool on the swing high and low shows that this lines up with the 50% correction level around .7800.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the downtrend is more likely to continue than to reverse. Stochastic is also turning down from the overbought zone to indicate that sellers are ready to take control once more, possibly sending price back down to the swing low or the channel bottom.
Cooling tensions between the US and China when it comes to tariffs appears to have led to a relief rally for the Aussie, but fresh geopolitical risks on Syria are in play. This could once again revive demand for the safe-haven dollar, especially as the FOMC minutes were more hawkish than before.
Fed policymakers agreed that gradual rate hikes should be maintained as the economic outlook has improved in recent months and annual inflation could keep rising. However, CPI data hasn’t been so impressive as the headline figure posted a 0.1% dip instead of staying flat.
By Kate Curtis from Trader’s Way