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AUD/USD keeps its range play intact below 0.7400, although holds the higher ground on upbeat Australian CPI data. Surging covid cases in Australia and extension of Sydney lockdown caps the upside. Markets remain cautious ahead of the Fed decision.
Theta price printed a new correction low on July 20, undercutting the May 19 low of $3.70 and the 78.6% retracement level of $3.54 before rallying 100% into yesterday’s high. The convergence of key resistance levels prevented an extension of the rally.
No change in rate policy or bond purchases expected. US economy appears to be slowing under labor, supply chain shortages. Treasury curve has flattened, inflation has jumped since the June 16 FOMC. Dollar has gained against most majors since mid-June.