AUD/USD bulls have found the daily cloud top to be formidable resistance but persistence is likely lead to a break once the Fed meeting and U.S.-China trade talks pass.
The slides in equity and commodity prices have combined with buying of Japanese yen to help erase earlier gains and turn AUD/USD lower on the day.
Risk-sensitive assets are trading with a cautious tone ahead of key risks this week.
The Fed decision and China-U.S.
trade talk loom large for AUD/USD.
The Fed is expected to maintain its patient stance, but traders will look for signs of adjustments to balance sheet reduction that could potentially soften the greenback.
trade talks are set for Wednesday and Thursday.
Should negotiations not break down or result in progress risk sentiment should be upbeat.
Technicals suggest the AUD/USD pause is temporary.
Monthly RSI is biased up to provide bulls a tail wind and a bull hammer candle is in place. If the Fed and trade talks buoy risk, AUD/USD is likely to break the cloud top and test 0.7230/50 resistance and the 200-DMA.
December's 0.7394 high is then in play.
chart: Click here