AUD/USD faces downside risk below 0.7680 amid pre-Fed anxiety

The AUD/USD treads water in the midweek’s Asian session. The pair moves in a very close trading range consisting of 10 pips. The sentiment worsened as for the first time, the aussie closed below 0.7700 since the previous five-six sessions.

At the time of writing, AUD/USD trades at 0.7689, up 0.05% for the day.

The US dollar remains steady following the mixed US economic data. The Retail Sales fell 1.3% in May, much below the market expectations at a 0.8% drop. The NAHB Housing Market Index eased to 81 in June, below the market consensus at 83.

The Producer  Price Index rose 0.8% in May, beating the market expectations at 0.6%. Next, the New York Empire State Manufacturing Index fell to 17.4 in June, much lower than the market forecast at 23.

On the other hand, the Australian dollar is weighed down amid escalating trade tensions with China. 

In the latest development, Australian Trade Minister Dan Tehan said that his government is fortifying its legal arguments before moving to the WTO for a resolution on its wine-tariff trade dispute with Beijing.

The copper prices fell to seven weeks low, as the world's second-largest economy decided to curb any further rise in commodity prices. China is the biggest consumer of copper and iron ore. Any delink in the prices could negatively affect the antipodean.

As for now, investors are gearing up for the Fed Rate Decision and the FOMC Economic Projections. 
Other readings are China’s Industrial Production Data and Retail Sales data.

The current USD valuations seem to discount the Fed Rate Decision as it is highly anticipated that the central bank will continue with its current monetary policy stance. 

The major focus will be on the future inflation and growth projections that could guide the next action on tapering and roll out of the ultra-accommodative monetary policy.

AUD/USD additional levels