AUD/USD inches higher toward 0.68 as attention shifts to FOMC minutes

RBA's Lowe calls escalating US-China trade war 'very worrying.'
US Dollar Index stays directionless above 98 mark.
FOMC is not expected to make any surprise changes to its language.

Eren Sengezer FXStreet

After closing the previous day with a modest 20-pip gain, the AUD/USD pair edged higher on Wednesday but still continues to in its tight two-week-old trading range, preserving its near-term neutral outlook. As of writing, the pair was up 0.25% on the day at 0.6793.

Commenting on the US-China trade dispute earlier today, Reserve Bank of Australia (RBA) Governor Philip Lowe said the escalating trade war was 'very worrying' and that it was hurting the global investment, wages and economic growth.

On a positive note, China's Foreign Ministry in a statement noted that it was natural for the US and China to have differences on trade and reiterated their desire to resolve those issues through dialogue. Furthermore, US President Trump today said that the US will probably make a trade deal with China to allow trade-sensitive antipodeans to cling to their daily gains.

Eyes turn to FOMC minutes

On the other hand, the lack of high-tier macroeconomic data releases from the US forces the US Dollar Index to move sideways near its opening level of 98.15 as investors refrain from making any bets before the FOMC releases the minutes of its July 30-31 meeting later in the session.

Previewing the FOMC statement, TD Securities analysts said that they would not be surprised if the meeting minutes revealed a debate among some participants who do not believe that the Fed should be cutting its policy rate at all.

"Powell and co are between a rock and a hard place as far as facing external pressures to ease; both from Trump and the bond market. To this end, we are more circumspect that the bond market will show much sympathy to a division in the Minutes, particularly with so much focus on Powell's appearance at Jackson Hole later this week,” analysts concluded.

Technical levels to watch for

AUD/USD

Overview
Today last price	0.6792
Today Daily Change	0.0016
Today Daily Change %	0.24
Today daily open	0.6776

Trends
Daily SMA20	0.6815
Daily SMA50	0.6909
Daily SMA100	0.6963
Daily SMA200	0.7056

Levels
Previous Daily High	0.6796
Previous Daily Low	0.6754
Previous Weekly High	0.6818
Previous Weekly Low	0.6736
Previous Monthly High	0.7082
Previous Monthly Low	0.6832
Daily Fibonacci 38.2%	0.678
Daily Fibonacci 61.8%	0.677
Daily Pivot Point S1	0.6755
Daily Pivot Point S2	0.6733
Daily Pivot Point S3	0.6713
Daily Pivot Point R1	0.6797
Daily Pivot Point R2	0.6817
Daily Pivot Point R3	0.6839

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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