AUD/USD is holding a range resistance after China printed a weak manufacturing report and ahead of the FOMC meeting minutes.
Does this mean that AUD/USD is ready for a trend change?
Let’s look at the 4-hour chart for clues!
AUD/USD has been locked inside a range after an uptrend that started in mid-October ended with a strong resistance at .6850.
What makes the pair interesting today is that it looks like .6800 will hold as resistance for a fourth time since December.
Stochastic is also favoring the bears as it hangs out in the overbought zone.
The 100 and 200 SMAs have also turned flatter, supporting AUD/USD’s shift from an uptrend to a range. A bearish crossover could entice more bears to jump in and price in a downswing.
The consolidation at the psychological level comes at a time when China’s manufacturing PMIs are reflecting a surge in COVID cases in December.
Meanwhile, traders around the world are bracing for more interest rate hikes from the Fed. In fact, the FOMC meeting minutes scheduled tomorrow would remind traders that not only is the Fed eyeing a higher terminal rate, most members also aren’t seeing interest rate cuts at least until 2024.
If more traders price in the Fed’s rate hikes, AUD/USD could drop from its range resistance levels to test the .6725 mid-range zone or the .6650 range support area.
Keep close tabs on market sentiment and any updates from today’s U.S. session trading in case we see intraweek trends that invalidate a bearish move for AUD/USD!
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