The Aussie dollar holds in quite mode ahead of Fed’s decision today, after Tuesday’s long-legged bearish daily candle signaled that three-day recovery from 0.6982 low might be running out of steam.
Recovery action show hesitation on approach to pivotal barriers at 0.7071/76 (Fibo 38.2% of 0.7205/0.6988 / falling 10SMA) and look for fresh direction signals.
North-heading momentum and stochastic are supportive, however, overall picture is still bearish and positive signal on close above 0.7071/76 pivots is needed to sideline bears spark further recovery.
Dovish shift in Fed’s statement would boost Aussie for break through 10SMA and attack at key 0.7104/20 resistance zone (cluster of daily MA’s / Fibo 61.8% of 0.7205/0.6988).
On the other side, hawkish stance from the Fed would boost the greenback and risk fresh weakness of Australian dollar, with return and close below 0.7030 support to generate initial signal of an end of recovery phase.
Res: 0.7061, 0.7071, 0.7076, 0.7104
Sup: 0.7030, 0.7000, 0.6988, 0.6931
