The AUD/USD is under some pressure as the market positions for today's FOMC decision, which is lining up as a binary event for the AUD/USD.
The pair is particularly vulnerable if the Fed hikes rates by 25bps as expected and delivers a hawkish message through the 'dot plot' and/or Chair Powell's press conference nL1N1TD1NR.
The Fed's dot plot only needs one more of the 15 members to increase a dot above the median of 2.15% to signal a fourth rate hike for 2018.
The market would then be forced to start pricing in a fourth hike, putting risk assets such as equities and EM under pressure while the USD would move broadly higher.
That combination would likely send the AUD/USD towards the May 9 trend low at 0.7413.
But a 'dovish' Fed hike with the dot plot and commentary remaining relatively unchanged would likely spur a relief rally in risk assets, and USD longs taken in anticipation of a hawkish Fed, would be forced to pare back.
This scenario could see the AUD/USD at least test 0.7650/90 where trend-line resistance and the 38.2 Fibo of the 0.8136-0.7413 move converge.
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