AUD/USD: Triple Top or Ascending Triangle?

Summary:

AUD/USD at crossroads as the market may have formed both an ascending triangle or a triple top. Bulls and bears must wait for a breakout.

The AUD/USD meets strong resistance at the 0.7820 area, and so far, sellers managed to defend it successfully. The Fed yesterday signaled that it has no intentions of tapering the asset purchases anytime soon, and so the dollar took another leg lower.

Not only the AUD/USD reflected the weakness in the dollar, but all pairs, with some exceptions – the USD/JPY, for example. The strength of the Australian dollar comes as a surprise considering the very weak inflation numbers we have seen this week.

The Fed said that it is not even thinking of tapering the asset purchases, in a surprising statement considering the strength of the American economy. Yet, the announcement was somehow priced in, as the Fed made sure it communicated its intentions very well prior to yesterday’s press conference.

AUD/USD Technical Analysis

Technical traders face a tough decision ahead. The market may show both bullish and bearish conditions, as suggested by a possible ascending triangle or a triple top.

We will not know until the market makes a move first. Therefore, the thing to do is to just wait for the market to make a move and close either above the 0.7820 area on a daily basis, or below the rising trendline. On such a move, traders may go long, respectively short, with a stop at the previous market swing.