AUDUSD - this pair is very ugly at rate decision time. It almost always spikes in both directions collecting limit orders and stops before making any move. The tight wedge that has formed and the four day narrow range in this pair mean that there is a good chance of tightly clustered stops that might just be too tempting.
Bigger picture this pattern is a descending broadening wedge formation which are usually bullish and break to the upside eventually.
The levels to watch in AUDUSD are 0.9250 resistance and 0.9150 support. I see a short target as 0.90 and the rising daily trendline from the lows, weekly 20ema and previous swing low.
Elliotwavers who I admire (like Jamie Saettele) prefer AUDUSD long here, but I see the top of the wedge pattern holding for now and it is a short for me until it breaks. Above 0.9250 and I am bullish.
If you are trading the rate decision watch the price action in EURAUD, it is a key driver in this pair.
If the RBA hike I see the best long opportunities in AUDNZD and AUDJPY.
If they do not and the market do not like it then I see the best short opportunities in AUDCAD, AUDCHF (check that level) and GBPAUD long.
Descending broadening wedge formation
UPDATE: The RBA hiked 25bps to 4.25%! Closed my AUD shorts, will wait and see if we break out of the top.
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