AUD/USD hits fresh YTD lows, FOMC decision in focus

   •  Resurgent US bond yields help offset USD weakness and prompt some fresh selling. 
   •  Weaker copper prices did little to lend any support and stall the downfall.
   •  The Fed's outlook for future interest rates should provide a fresh directional impetus.

The AUD/USD pair struggled to build on early tepid recovery move and fell to fresh three-month lows in the last minute. 

The pair failed to capitalize on some renewed US Dollar weakness, with a goodish pickup in the US Treasury bond yields seen as one of the key factors prompting some aggressive selling around higher-yielding currencies - like the Aussie. 

Expectations that the Fed would raise interest rates by 25 bps, and signal towards a faster monetary policy tightening cycle remained supportive of the recent upsurge in the US bond yields and reason behind the pair's slide to fresh YTD lows. 

Hence, investors' focus would remain glued to the Fed's latest economic projections and the outlook for future interest rates, which would drive the USD in the near-term and eventually provide some fresh directional impetus.

Technical levels to watch

A follow-through weakness below 0.7665 level now seems to drag the pair even below 0.7640 intermediate support towards challenging the 0.7600 round figure mark. On the upside, the 0.7700 handle now becomes immediate resistance, which if cleared might prompt some short-covering move and lift the pair back towards the 0.7720-30 supply zone.

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