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AUD/USD Forex Signal: Double-Top Pattern Forms Ahead of FOMC Minutes

Bearish view

  • Open a short position and add a take-profit at 0.6600.
  • Set a stop-loss at 0.6710.
  • Timeline: 1 day.

Bullish view

  • Set a buy-stop at 0.6675 and a take-profit at 0.6750 (78.6% retracement).
  • Add a stop-loss at 0.6600.

AUD/USD Signal Today - 22/05: Double-Top Pre-FOMC (Chart)

The AUD/USD remained in a tight range as traders reflected on Tuesday’s Reserve Bank of Australia (RBA) minutes and statements by several Federal Reserve officials. It was trading at 0.6665, down from last week’s high of 0.6720.

Fed and RBA forecasts

The AUD/USD pair is halving a calm week since Australia and the US have already published the most important economic numbers for this month.

The US published the important inflation, building permits, housing starts, and manufacturing and industrial data last week. These numbers showed that inflation moved downwards slightly last month, which is a positive thing.

However, the other numbers implied that the American economy was slowing, meaning that the Fed may decide to start cutting interest rates later this year. Several Fed officials have called for patience on rate cuts.

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    In a statement on Tuesday, Fed’s Christopher Waller said that the bank was still concerned about inflation. He expects officials to wait for several more months of good inflation numbers to start thinking about cutting.

    This view was shared by officials like Raphael Bostic and John Williams who believe that it is still too early to start cutting rates. The Fed will publish minutes of the last meeting on Wednesday.

    Meanwhile, RBA minutes released on Tuesday showed that the bank was still concerned about inflation. The officials deliberated raising interest rates but decided against it and hiked their headline CPI.

    Therefore, these minutes hinted that the bank will maintain high interest rates for longer since it expects rates to drop to the 2% target range in 2025.

    AUD/USD technical analysis

    The Australian dollar has been in a slow uptrend after bottoming at 0.6360 earlier this month. It peaked at the important resistance point at 0.6710 and formed a small double-top pattern. In most cases, this is one of the top bearish signs in the market.

    The pair is hovering at the 61.8% Fibonacci Retracement point. It is also slightly above the key support at 0.6643, its highest swing on April 9th of this year. This performance is a sign that it has formed a break and retest pattern, a popular continuation sign.

    Therefore, the pairs outlook is neutral with a bearish bias because of the double-top pattern. If it works out, it will likely drop and retest the psychological level at 0.6600. On the other hand, a move above last Friday’s high of 0.6710 will point to more gains.

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    Crispus Nyaga
    About Crispus Nyaga
    Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube,, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.

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