AUD/USD flirting with the 0.7200 handle, 3-day highs

The Aussie Dollar picks up further pace and reclaims 0.7200.
Attention remains on US-China trade talks, starting today.
FOMC meeting will be in centre stage later today.

Pablo Piovano FXStreet

A fresh wave of buying interest in the Aussie Dollar is now helping AUD/USD to move higher and retake the critical barrier at 0.7200 the figure, testing 3-day highs at the same time.

AUD/USD looks to trade, FOMC

Spot regained extra steam overnight after Australian inflation figures tracked by the CPI rose 0.5% inter-quarter during the October-December 2018 period and 1.8% from a year earlier, both prints coming in above expectations.

In addition, hopes of a trade deal between US and China remain high in light of the 2-day talks starting later today in Washington, all supportive of a better mood in AUD. In the same direction, AUD is deriving extra support from the positive outlook on iron ore prices, as per a recent report from Goldman Sachs.

Later in the session, the ongoing squeeze higher in spot will be put to the test in light of the FOMC event. That said, consensus sees the Fed keeping rates on hold, while Chief Powell’s presser could come in on a dovish tilt.

AUD/USD levels to watch

At the moment the pair is gaining 0.65% at 0.7201 and looks to the next resistance at 0.7234 (2019 high Jan.11) seconded by 0.7298 (200-day SMA) and then 0.7393 (monthly high Dec.3 2018). On the other hand, a breakdown of 0.7146 (21-day SMA) would open the door to 0.7138 (low Jan.29) and finally 0.7075 (low Jan.25).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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