The US dollar perked up mid-Asia, weighing notably on commodity currencies AUD and NZD ahead of the meeting. With a likely swing high in pace, AUD/USD could be headed for 70c.

With DXY currently within its 7th bearish session over the past 8, its plausible that traders were booking profits ahead of today’s Fed meeting, during an otherwise uneventful session. A spike on the dollar was seen across the board for FX and most commodities, although at time of writing, AUD/USD is today’s weakest performer and largest move among majors and crosses.

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Looking past the Aussie’s flash crash, which saw prices spike below 70c during low-liquidity trade, prices have mostly remained above 70c. However, we can see the 200-day eMA has capped as resistance whilst a series of lower highs formed. Furthermore, the 0.7207 and 0.7120 lower highs have accelerated away from the 200-eMA which shows a pickup of bearish momentum. Zooming into the candlesticks shows the 0.7120 high respected the 50-day eMA, and today’s action has broken beneath a bearish inside candle and 0.7078 to mark a breakout form compression and potential swing high at 0.7120.

We can see the hourly chart that prices broke beneath a retracement line. Traders could consider fading into a move beneath the 0.7060/83 resistance zone and / or the broken retracement line, with a view to target the 0.7039/44 lows. Beneath here opens-up the support zone above 70c. However, keep in mind that AUD has not seen a monthly close beneath 70c in nearly 10 years, so expect this level to be defended with vigour.

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