Best trade setup before the upcoming FOMC meeting minutes

Traders among all parts of the globe are facing extreme trouble to identify the current pattern of the financial instrument. Even the most successful forex traders are having really bad months in this year. There has been a strong contradiction regarding the interest rate hike decision from the very beginning of the year. The FED was trying to hike their interest rate at an early part of this year which has not yet been executed. The US economy was struggling very hard and shaking with the world economic crisis. Despite the hard financial crisis in the US, the FED has taken their initiative to hike their interest rate in the month of September. But the rate hike decision is now in trouble due to severe bad economic data of US unemployment claim and average hourly income. Investors are in fear that the fight might not hike their interest rate in the month of September which will cause tremendous weakness to the US dollar. According to the economic researchers, there is only 20% chance that the FED will hike their interest rate within this month,

If the FED fails to hike their interest in this month then traders will again wait eagerly for the month of December which has 60% probability of rate hike. To be precise if the FED fails to hike their interest rate then the market will remain cloudy as it was before. Currently, the traders are not getting any clear indication about the next possible price move of the major elements. It seems like the US dollar remains broadly weaker against its major rivals throughout the week and all of a sudden it gains backs its former strength. a totally chaotic situation is prevailing in the market which can only overcome by the clear rate hike decision.

The EURUSD pair has been suffering from loss for the last couple of two weeks. Though the pair managed to rally upward and make a high near the 1.16000 level but the gain was washed away with the possible interest rate hike decision of the FED. The cable suffered the extensive loss on 24th June 2016.The Brexit event caused more than 2000+ pips drop in the GBPUSD pair in a single day. After hitting a low of 1.28000 level the pair managed to find some support for its minor correction. The correction of the pair was capped by the critical resistance level situated at 1.34758.The most two traded currency pair in the world is now trading in a risky situation with a massive confusion of its next movement. Comparing all the major currency pair the best pick is the AUDUSD pair before the FOMC meeting minute.

The long-term uptrend of the AUDUSD pair is currently at risk since the price has broken critical uptrend line. Currently, traders are waiting cautiously for the price to retrace back to the 0.7700 level to enter short in this pair. The long term weekly downtrend is still intact in the weekly chart. Moreover, tweezers top price action confirmation signal has just been printed near the trend line resistance. The AUDUSD pair has tested the weekly trend line resistance for fourth consecutive times and failed miserably .If the FED adjust their inflation rate in the middle of September then there is good chance the medium-term upward rally of AUDUSD pair will come to an end. Keeping the interest rate decision in mind many traders are staying on the side even though the AUDUSD pair is offering lucrative selling opportunity to the traders. Smart investors are waiting for the minor retracement of the price towards the trend line resistance at 0.7650 level to enter short in the market. Though the there is only 20% chance of interest rate hike in this month but there is strong possibility that the FED will hike their interest rate to safeguard their economy. But the hike will be followed by the dovish statement which will neutralize the strength of the US dollar and put a barrier to its loss. To be precise the month of September is extremely important for the investors since lots of major economic decision will taken. So it’s better to stay cautions and trade maturely.

Considering all the situation and technical parameters the Aussie dollar provides the best trading opportunities to the traders. The weekly trend line is offering excellent trade setup with amazing risk reward ratio. The signal has been further strengthening up by the tweezers bottom formation right at the trend line resistance at 0.7700 marks. The daily chart has also formed nice bearish pin bar. If the trade setup is correct then the first downfall for the pair is near the 0.7400 mark. If that level holds then we might see another strong rise towards the 0.76000 mark. But a daily closing below the 0.7400 level will bring strong bearish momentum to this pair. The next critical support lies near the 0.7000 mark which is most likely to be taken out by the sellers. Once the pair breaches the 0.7000 level then the market sentiment will be totally bearish, a safe haven for the short traders. Forex traders are advised to use the trailing stop loss features if they trade AUDUSD weekly resistance rejection before the FOMC meeting minute to maximize their potential profit. Keeping the upcoming FOMC meeting minute in mind it is highly imperative that traders use proper risk management factors before executing any live trade in the market.