AUD/USD: 0.78 within reach post-FOMC

The AUD/USD is continuing to stretch following the FOMC's rate hike earlier, and the pair reached a new session high of 0.7780 before falling back into 0.7765 heading into the overnight session.

The Aussie caught a ride higher amidst market-wide Greenback selling following the US Fed's twenty-five basis point interest rate hike to 1.75%. The USD receded across the board and equities declined as the FOMC failed to deliver the all-important 'dot plot' increase, holding their internal expectations at three rate hikes in 2018 instead of the four that many are expecting. However, analysts at Rabobank have noted that while the FOMC hasn't called for four hikes this year, they are very close to it, and one tiny adjustment in June could see them up the hike count.

Aussie employment in the pipe

With the US interest rate out of the way, the Aussie market now turns to Australian jobs figures. Australia's Employment Change is expected to come in at 20k versus the previous period's 16k, while the Unemployment Rate is forecast to hold steady at 5.5%, the same as the previous period. Both indicators are dropping at 00:30 GMT, early Thursday. The AUD has been getting a licking in markets lately as middling macro data for the country continues to squeeze the Reserve Bank of Australia (RBA) into a wait-and-see pattern on their own interest rate increases, and the RBA is expected to stand pat on rates until later next year. Positive jobs figures could help the Aussie get back on the rails with their growth expectations, but Australia still has a long way to go.

Further headwinds can be expected in the AUD when Trump unveils his next round of tariffs targeting China; a hefty dose of trade goods duties could put more downward presure on the AUD as the Aussie prepare to brace for what would be a windfall of Chinese-made goods if the US' levies have the clout to deter exporting from China into the US.

AUD/USD Levels to consider

As FXStreet's very own Valeria Bednarik noted earlier, "Technically, the pair recovered above the 61.8% retracement of its December/January bullish run at 0.7740, now the immediate support. In the 4 hours chart, the pair also advanced sharply above its 20 SMA, while technical indicators neared overbought readings before paring gains, anyway favoring additional advances, particularly on a break above 0.7779, the daily high."

Support levels: 0.7740 0.7700 0.7665  

Resistance levels: 0.7780 0.7815 0.7840