- AUD/USD consolidates the post-Fed rally while markets now await tariff news.
- AUD/USD pair is trading bullish according to intraday technical readings.
AUD/USD has morphed into a consolidation of the rally from 0.68 the figure to post-Fed's Powell comment 0.6888 high. AUD is currently trading at 0.6879 from a low of 0.6867 in Asia.
AUD/USD was the outperformer overnight with a steady drift higher throughout London to 0.6867 when the FOMC statement was digested and then further on the back of the presser where Federal Reserve's Chairman, Jerome Powell, dropped the bomb by doubling down on his opinion that inflation would have to be 'significantly' and 'persistently' higher before Fed rates could be moved up again.
Key takeaways from FOMC statement and projections
- The market has priced in virtually no chance of rate move through February.
- IOER 1.55% vs 1.55% prior.
- Fed drops language about ‘uncertainties about this outlook remain’.
- Vote was unanimous.
- “The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate”.
- No changes in the economic outlook paragraph.
- Says “the current stance of monetary policy is appropriate”.
- Leaves forecasts for GDP and inflation unchanged, lowers unemployment.
- Median forecast is for one rate hike in 2021 and one in 2022.
Elsewhere, the US November Consumer Price Index climbed 0.3% (vs 0.2% expected), with the core up 0.2% (as expected). the aggregated took the annual pace to 2.1% (vs previous at 1.8%), and 2.3% core. However, this had little bearing on the markets awaiting further news on tariffs and the Fed.
On tariffs, in recent trade, we have very little to go on and its a waiting situation as US President Donald Trump will meet with top advisors today and likely make a subsequent decision to either 'twist or hold' in what will be very crucial gameplay – more on that here
AUD/USD levels
Valeria Bednarik, the Chief analyst at FXStreet explained that the AUD/USD pair is trading bullish according to intraday technical readings:
"It’s firmly above the 61.8% retracement of the November decline, the immediate support at 0.6865. In the 4-hour chart, technical indicators maintain their bullish slopes in overbought levels, while the price is well above all of its moving averages, which remain directionless. The immediate resistance is 0.6900, while a more relevant one comes at 0.6930, October 31st high."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.