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FOMC Rate Hike Strengthens Dollar; AUDUSD and NZDUSD Stay Bearish


A far more bearish shift again for both AUDUSD and NZDUSD after the FOMC rate hike decision on Wednesday 14thDecember. The significant US Dollar rally across G10 currencies in the wake of the decision (with guidance seen as more hawkish than anticipated), has produced negative short-term signals for both the Australian Dollar and New Zealand Dollar versus the US currency.

This leaves risk of a re-energizing of the intermediate-term AUDUSD and NZDUSD bear themes that have been developing since November, leaving bias for further losses into year-end.

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AUDUSD

A plunge lower after the FOMC decision on Wednesday, to break support .7472/65 and .7413/08, to set a bearish outside pattern, to indicate a bear reversal in the very short-term, shifting the bias lower for Thursday.

For Thursday:

  • We see a downside bias for .7396; break here aims for .7367/60 and maybe .7306.
  • But above .7472 opens risk up to .7525.

Furthermore, the mid-November break of .7438 completed a multiple peak topping pattern, which leaves an intermediate-term bearish theme.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to .7284 and .7141.
  • Below here targets .7000, .6971 and .6825.

What Changes This? Above .7630 signals a neutral tone, only shifting positive above .7778.

Daily AUDUSD Chart

audusd chart

NZDUSD

A plunge lower after the FOMC decision on Wednesday for a bearish outside pattern, through support at .7154/50 and to prod .7111, to indicate a very short-term bear reversal, shifting the bias lower for Thursday.

For Thursday:

  • We see a downside bias through .7111 for .7098/93 and .7066.
  • But above .7174/76 opens risk up to .7239.

Moreover, the mid-November breakdown through the multi-month “neckline” of the Head and Shoulders top from July, signalled an intermediate-term bearish shift, confirmed below .7030.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to .6948.
  • Below here targets .6800 and .6676/64.

What Changes This? Above .7403 signals a neutral tone, only shifting positive above .7485.

Daily NZDUSD Chart

nzdusd chart

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