AUDUSD is slowly trending higher, moving inside a rising wedge pattern visible on its 1-hour and 4-hour charts.

Price is testing the resistance and could be due for a move back to support at the .7475 level.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. The 200 SMA lines up with the wedge support, adding to its strength as a floor. However, if a breakdown occurs, a longer-term downtrend could be in the cards.

Stochastic is heading south to show that sellers are in control of price action for now. However, the oscillator is already dipping into the oversold region to show that bearish pressure is about to fade and that buyers could regain control.

The main event risk for the day is the FOMC statement, as the Fed is expected to hike interest rates by 0.25% while making adjustments to their dot plot forecasts and economic projections. Fed Chairperson Yellen might give a few cautious remarks to prevent any excessive risk rallies or profit-taking among bonds and equities.

Earlier in the day, Australia reported a 3.9% slump in Westpac consumer sentiment for December, following the earlier 1.1% drop. New motor vehicle sales were down 0.6% compared to the previous 2.4% slide, indicating that financial confidence is still shaky.

US retail sales and PPI figures are also up for release in today’s US session. Headline consumer spending could be up 0.3% while core retail sales could show a 0.4% gain, both weaker than their previous readings. Meanwhile, headline PPI is slated to show a 0.1% uptick while core PPI could print a 0.2% gain.

By Kate Curtis from Trader’s Way