AUD/USD rallies post FOMC looking for 0.7950, collapses again to threat potential 0.7800 test
|- AUD/USD bulls rescued from an onslaught to 0.7800.
- AUD/USD bulls need to get above 0.7950.
AUD/USD spiked on dollar weakness after a mixed set of FOMC minutes but is running out of steam on the way to the converging 50 and 200 hr SMA. But, as soon beaten up and sent back towards 0.78 the figure as the dollar bulls pick up a cheap offer. Currently, AUD/USD is trading at 0.7825, down -0.70% on the day, having posted a daily high at 0.7903 and low at 0.7820.
The Aussie has been in decline and better offered, faded on rallies since the sell-off from 0.7988 last week and for the best part has struggled to get head above water, contained by the descending 21 and 10 hourly SMAs. There was a shortlived spike overnight on the wages data that was met with heavy artillery from the bears again while the dollar continued to stabilise, chasing down the 90 handle in the DXY.
Markets getting long of stocks while FOMC uncertain about inflationary pressures
However, markets have decided to get long of stocks today which has taken some steam out of the greenback and has allowed the Aussie and commodities, in general, some time in the driving seat. Gold was especially bid o the release of the minutes that point towards higher inflation but was projected higher on dollar weakness where there was a hint of caution from Fed officials on the minutes.
FOMC Minutes: officials saw an appreciable risk of inflation lag to target
While all officials agreed that the inflation target should be met in 2018, some officials, however, also saw an appreciable risk of an inflation lag to the 2% target. That was enough to send yields lower and the DXY back to 89.60 at the time of writing.
AUD/USD levels
Bulls were rescued from an onslaught by the bears to test the bulls commitments at the 0.7800 level while a constructive case was made for such an attack with the price developing offers below the 21-D SMA at 0.7940 and the converging 10 and 50-D SMAs. However, for bulls to get the green light for higher grounds, 0.7950 and 0.8000 (as an option barrier level) are the key resistance levels beyond 0.7935/41, (21-D SMA area). Analysts at Commerzbank explained that the recent high at 0.7988 guards the key resistance lies at 0.8124/62 (the September 2017 high, the May 2015 high and the long term 50% Fibonacci retracement of the move down from 2014).
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