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AUD/USD Extends after Triangle Breakout; 0.89 is Key

The AUD/USD has been bullish this week. In fact, we are seeing some strength in the comm dolls, NZD and CAD. The USD is soft, but has been tentatively resilient ahead of the FOMC announcement.

When we look at the 4H AUD/USD chart, we can see that price has broken above a symmetrical triangle that was forming during the second half of October.

AUD/USD 4H Chart 10/29(click to enlarge)

As we approach the FOMC decisions/statement, AUD/USD looks poised to test the 0.8898-0.89 resistance area. 

A break and hold above 0.89 would be a sign of bullish correction, making October's price action a price bottom. Now, we might see a pullback, but if 0.89 was broken and price still holds above 0.88, the bullish outlook would still be in play.

However, if price falls back below 0.88, whether 0.89 held or not, the bullish outlook might not be strong enough. A break below 0.8775 would clear below the SMAs, and should revive the bearish outlook especially if the 4H RSI falls back below 40.