AUD/USD: where now after FOMC, bulls look resilient, need a firm few closes above 0.8030 to resume uptrend
|Currently, AUD/USD is trading at 0.8022, down -0.11% on the day, having posted a daily high at 0.8038 and low at 0.8018.
FOMC's updated economic projections - Sep 20, 2017
AUD/USD's upside before the FOMC could be put down to the carry trade in what had been a low volatility environment ahead of the Fed, along with prevalent advances in the metals and rock solid oil. The VIX fell to a 6-week low at 9.85 while the Aussie traded as high as 0.8058 in early European trade and then onto 0.8087 pre-FOMC highs.
Forex today: Fed proves to market it means business, regardless, dollar soars
However, once the market digested the hawkishness in the dot plot and bullishness for the US economy, after an initial knee-jerk spike to 0.8102, the US dollar took control of the board. AUD/USD dropped to 0.7985 the low before catching a bid back onto the 0.80 handle and settling in the 0.8020's, making for a slight gain compared to the previous day's close and above previous US session high of 0.8019.
"AUD/USD 1-3 month: If the RBA remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then AUD/USD could fall to 0.76 by year end," argued analysts at Westpac
AUD/USD levels
Valeria Bednarik, chief analyst at FXStreet explained that the 4-hour chart indicates that the pair maintains a positive stance, as additionally, Wall Street bared pretty well with Fed's tightening.
"Technical indicators in the mentioned time frame have bounced from their mid-lines, whilst the price held above its 20 SMA, despite some intraday attempts to break below it. Renewed buying interest beyond 0.8030 will probably see the pair re-visiting its recent highs," Valeria noted.
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