AUD/USD retreats to 0.7320 as DXY rebounds above 93.00
|- AUD/USD struggles to preserve its bullish momentum in American session.
- US Dollar Index recovers above 93.00 ahead of Fed announcements.
- Retail Sales in US rose less than expected in August.
The AUD/USD pair climbed to its highest level in more than 10 days at 0.7344 on Wednesday but lost its traction during the American trading hours. As of writing, the pair was still up 0.2% on the day at 0.7316.
DXY climbs above 93.00 ahead of FOMC event
After spending the majority of the day in the negative territory near 92.80, the US Dollar Index (DXY) staged a rebound in the last hour and turned positive on the day above 93.00. The data from the US showed that Retail Sales in August rose by 0.6% and the NAHB Housing Market Index improved from 78 to 83 in September.
Meanwhile, investors are gearing up for the Federal Reserve's policy announcements and FOMC Chairman Jerome Powell's press conference. At the moment, the DXY is up 0.03% on the day at 93.10.
Previewing this event, “if the Fed refrains from optimism on a return to growth, it means lower rates for longer, something that markets would cheer," said FXStreet analyst Yohay Elam. "On the other hand, investors may become more concerned about the bumpy road ahead. US equities – and especially high-flying tech-stocks – have suffered a downtrend correction, that may have yet to reach the bottom.”
A negative reaction in Wall Street could help the greenback gather further strength against its rivals through safe-haven flows and weigh on AUD/USD.
On Thursday, the Australian Bureau of Statistics will release the August labour market report.
Technical levels to watch for
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