Dollar Drops After The FOMC But China Is Here To Help

Dollar weakened and stocks went higher, which is rather a typical reaction for the anticipation of a rate cut, rather than rise.

The instrument, which used the yesterday event in its favor is Gold. The price bounced from the 1480 USD/oz support and the upper line of the flag, which in this case was used as a support. Last two daily candles on Gold looks promising and we can expect, that the price will aim 1518 USD/oz, which can be considered as a closest resistance. Sentiment is positive.

Now, two pairs from antipodes. AUDUSD will go first. Aussie managed to break the neckline of the nice inverse head and shoulders pattern. In the same time, we attacked the long-term down trendline. The second one is still under pressure but information from China is definitely not helping. Daily chart gives us a shooting star pattern, which can be a trigger to the bigger selloff.

NZDDUSD also has an inverse head and shoulder pattern but here still without the breakout. Interestingly, head of this pattern is created from a smaller iH&S. We can say that Kiwi really loves this structure. 0.643 is an ultra-important resistance right now and buyers are fighting to change it into a support, which could give them a sweet long-term buy signal.

This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory