AUDUSD Forecast Update: FOMC Ahead
The Fed pumps “cash” liquidity into the markets but DXY continues its rally. Why?
Things go on as we predicted.
I have mentioned in my previous investors’ report before. There will be a lack of USD.
We predicted the short term sell-off in Gold due to the same reason. That is why DXY rallies.
“In case of an increase in the number of cases in the United States or if the global dollar liquidity narrows further, the FED will go to 1- interim rate cut ( as earl as possible, before March 18th, 2- to continue repo operations where it thinks to terminate 3- to activate international swap lines that will pump more quality collateral into the market. 4. to act together with other Major CBs.”
And the 18th of March came closer: FMOC Meeting.
We will post a detailed analysis of the potential results of different FOMC Statement scenarios. But as I mentioned before “cutting the rates” ” pumping the liquidity” will not help anything. The Fed must support these two actions with swap lines operations. More than this, the market does not believe that the worst is over.
The USD may stay as the most valuable commodity medium term.
Looking at the AUDUSD pair:
Our last call was to resell the pair at 0.66500 – the pullback towards the broken structure. Our target was 0.62500 and it is achieved. Aussie ended the week at 0.61800.
What is next?
We recommend trading less until the FOMC statement. We predict bearish continuation medium term. If the FED can not convince the markets, the pair is likely to test its 2008 low at 0.6000 and 0.58500 ( MM +4/8 Support Monthly )
However, a bullish AB=CD pattern would be completed at 0.60900. We may see a retracement towards 0.62500 – 0.63500 before the bearish continuation.
Our medium-term plan is selling the pullbacks targeting 0.60000 and 0.58500.
Any intraday trading opportunity will be posted and live interactive charts will be updated.
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