AUD/USD climbs to 0.76 neighborhood as FOMC decision looms

   •  A modest USD retracement helps build on intraday recovery from 1-1/2 week lows.
   •  USD bulls seemed little impressed by surging US producer prices. 
   •  Focus remains on the key FOMC announcement and updated economic projections.

The AUD/USD pair built on its rebound from 1-1/2 week lows and jumped to the 0.7600 neighborhood during the early North-American session.

With investors looking past dovish comments by RBA Governor Philip Lowe, a modest US Dollar retracement was seen as one of the key factors behind the pair's goodish rebound from an intraday low level of 0.7556.

Today's hotter-than-expected US PPI print, rising 3.1% y/y in May - the biggest rise in nearly 6-1/2 year on the back of a surge in gasoline prices and continued gains in the cost of services, did little to impress the USD bulls and remained supportive of the recovery move. 

Heading into the key event risk - the highly anticipated FOMC decision, repositioning trade might have prompted traders to lighten their bearish bets and seems to have further collaborated to the pair's steady climb back closer to the 0.7600 handle. 

It, however, remains to be seen if the pair is able to build on the momentum or the up-move is utilized as an opportunity to initiate fresh short-positions amid expectations for a hawkish economic projections.

Technical outlook

Immediate resistance is pegged near the 0.7610 level, above which the pair could aim back towards clearing 100-day SMA hurdle near the 0.7660-65 region. On the flip side, weakness back below 0.7570-65 area might now turn the pair vulnerable to slide further towards 0.7520-15 intermediate support en-route the key 0.7500 psychological mark.

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