AUD/USD again bounces off 17-week old support-line ahead of Australian housing data
- Short-covering is underway after an important event with the domestic one lying forward.
- 0.7000 round-figure gets additional support through near-term rising trend-line.
Like all other G10 currencies, AUD/USD also trims some of its past-FOMC losses as it trades near 0.7015 during the early Asian session on Thursday. The Aussie pair couldn’t withstand Fed’s Powell’s avoidance of hinting catalysts for a rate cut and tanked with all other majors during the aftermath of the US Federal Reserve decision.
Except for a 5 basis point reduction into the interest on excess reserves (IOER) rate, the Fed announced no change in its current monetary policy on Wednesday. The US central bank did upwardly revised growth outlook while downplaying inflation.
However, Chairman Jerome Powell turned out as a show-stopper by terming recent inflation moves as temporary, being optimistic about the economic growth and giving less importance to the factors that could give rise to an interest rate cut by the Fed.
In spite of registering more than 50 pips losses after the FOMC, the Aussie refrained from declining below an upward sloping trend-line stretched since January 04.
March month figures of HIA new home sales from Australia will gain the immediate attention of the pair traders. The housing market gauge rose 1.0% in its latest data.
It should also be noted that the market’s risk sentiment is also struggling as the US 10-year Treasury yields remain near 2.5% after registering one basis point of gain to 2.51% by the end of Wednesday.
Furthermore, the US and China are moving fast on their trade discussions. Recent news suggests that both the world’s largest economies are ready to step some of the previous tariffs back from each other’s products in order to give an additional positive boost to the chances of a trade deal.
While the absence of Chinese and Japanese players from the market may hinder liquidities of Asian currencies, the European and the US sessions could entertain momentum traders.
Technical Analysis
Unless breaking 0.7000 trend-line support, chances of witnessing 0.6980 and 0.6910 remains less.
On the upside, 0.7030, 0.7055 and 0.7070 may act as nearby resistances ahead of 50-day simple moving average (SMA) level of 0.7100.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
