Aussie dollar posting a bullish threat despite possible U.S rate hike
The Aussie dollar has been doing fairly well in the global market for the last couple of two weeks. The long term bearish trend in the AUDUSD pair was ceased after the formation of the initial bottom of the pair near the critical support level at 0.7158.Most of the leading investors made a decent profit in their online trading account by riding the medium term uptrend in the AUDUSD pair in the daily chart. Though the pair has been surging upward for few consecutive weeks most of the leading investors are now worried about the next movement of the Aussie dollar due to pending rate hike decision by the FED. If FED chairperson Janet Yellen hike their interest rate on the basis of 25 points in the global market then we will see a strong decline in the Aussie dollar. But a dovish rate hike will allow the Aussie bulls to drive the price up again in the market.
U.S pending rate hike decision: Most of the leading investors in the global economy are currently on the sideline due to the upcoming FOMC meeting minute. According to the leading economist in the global market, the U.S dollar index might face further bearish pressure in near future as the recent performance of the U.S economy doesn’t permit three rate projected rate hike by the FED. Some of the optimistic dollar bulls are in fear since an immature rate hike might trigger long term bearish trend in the U.S dollar index.
Currently, the U.S dollar index is trading above the critical support level and traders are expecting a decent bounce in the market. If the FED manages to hike their interest rate on today’s FOMC meeting minute then we will see a strong bullish rally in the Green bucks which will ultimately push the price of its major rivals lower in the market. The FED will try their best to come up with a hawkish hike as the U.S central bank will also create pressure for the U.S rate hike.
Testing critical level in the technical chart
The AUDUSD pair has breached the bearish medium term trend line resistance at 0.7446 level on the daily chart. Some of the aggressive traders have already entered long in their online trading account with an initial target of the critical resistance level at 0.7529. This level is going to provide a significant amount of selling pressure to this pair as the daily 200 SMA lies along with the cluster of resistance. Most of the professional traders in the global industry will look for bearish price action confirmation signal to short the AUDUSD pair at the 200 day SMA but a clear break of that level will trigger another fresh buying pressure in the market. The aggressive buyers might execute long orders in their online trading account after a clear break of the 0.7529 resistance level in the global market.
Trader’s sentiment: The leading traders in the world are now on the sideline as the market has not yet exhibited any clear clue to the traders around the globe. Despite the smoky environment some of the investors are thinking that May’s FOMC meeting minute will not create any heavy impact in the global market. So it’s better to stay cautious and trade the market after the dust settles down in the economy.
Summary: THE AUDUSD pair is one of the most traded major pairs in the forex market. Currently, the pair is trading near a critical resistance level in the global market and most of the investors are cautiously waiting for the FED decision. If the FED comes up with the dovish statement then will see another strong bullish rally in the Aussie dollar and hawkish hike will bring the bears back in the market. So it’s better to stay cautious and trade after the market present more favorable trading conditions.