AUD/USD consolidates near 0.6875 ahead of the key day

Aussie buyers cheered trade positive news but remain on the sideline ahead of the key FOMC.
Global risk sentiment continues to linger due to Draghi’s speech at Sintra.

Anil Panchal FXStreet

Having been buoyed by the upbeat risk sentiment, mainly due to the trade positive news, the AUD/USD pair stabilizes near 0.6875 during the early Asian session on Wednesday. Investors remain cautious ahead of the key FOMC meeting decision while developments surrounding the US and China trade talks, coupled with geopolitical plays between the US and Iran, will also be followed for direction.

Despite dropping during early Tuesday, on the back of dovish RBA minutes and Aussie housing price data, the Australian Dollar (AUD) posted its first positive daily closing since June 07 as investors cheered welcome updates from Chinese media and the US President Donald Trump’s tweets concerning the trade talks at the upcoming G20.

However, the global benchmark for risk sentiment, the US 10-year treasury yield remains negative to 2.058% by the press time due to pessimism spread by the European Central Bank (ECB) President Mario Draghi at the closing ceremony of ECB Forum in Sintra.

While trade positive news renewed global risk sentiment yesterday, traders have started turned cautious ahead of today’s the Federal Open Market Committee’s (FOMC) monetary policy decision amid global central bankers’ run for easing.

While no change expectations give little importance to headline Fed rate decision, the quarterly growth and rate forecasts together with the Chairman Jerome Powell’s press conference will be observed closely to predict the US central bank’s future policy moves.

Technical Analysis

Unless clearing May 30 low near 0.6900, the Aussie pair can’t aim for 0.6940/45 resistance-area, needless to mention about 50-day simple moving average (SMA) level of 0.6988. With this, chances of its pullback to 0.6860, 0.6830 and then to the 0.6800 seem brighter.

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.

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