AUD/USD jumps to test key resistance as US Dollar tumbles after Fed

Fed raises rates by 25 bps, as expected.
US yields and Dollar tumble on initial reaction; before Powell.
AUD/USD testing key resistance around 0.6730

Matías Salord FXStreet

The AUD/USD jumped to 0.6727 after the decision of the Federal Reserve, hitting a fresh daily high. It is testing the critical resistance zone around 0.6730 amid the broad-based Dollar’s weakness.

The Federal Reserve (Fed) raised its key interest rate by 25 bps as expected to 4.75%-5.00%. The vote was unanimous. The Fed warned that inflation remains elevated while at the same time dropping the forward guidance toward further rate hikes. The central bank said it was too soon to assess the impact of the banking crisis on the economy.

The greenback tumbled together with US yields. The US 10-year fell to 3.50% before bouncing to 3.53% while the 2-year reached momentarily levels under 4.00%.

Wall Street indices reacted to the upside; however, they have retreated a bit during the last minutes. The improvement in market sentiment offers extra support to the AUD/USD.

Fed Chair Powell is about to start its press conference. If his words align with the statement, the US Dollar could continue its slide, boosting AUD/USD above the key resistance zone of 0.6730.

Powell Speech Preview: Dovish remarks after raising interest rates to 5% - Follow LIVE

Technical levels

AUD/USD

Overview
Today last price	0.6706
Today Daily Change	0.0037
Today Daily Change %	0.55
Today daily open	0.6669

Trends
Daily SMA20	0.6693
Daily SMA50	0.6862
Daily SMA100	0.6783
Daily SMA200	0.6763

Levels
Previous Daily High	0.6726
Previous Daily Low	0.665
Previous Weekly High	0.6725
Previous Weekly Low	0.6579
Previous Monthly High	0.7158
Previous Monthly Low	0.6698
Daily Fibonacci 38.2%	0.6679
Daily Fibonacci 61.8%	0.6697
Daily Pivot Point S1	0.6637
Daily Pivot Point S2	0.6605
Daily Pivot Point S3	0.656
Daily Pivot Point R1	0.6714
Daily Pivot Point R2	0.6758
Daily Pivot Point R3	0.679

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.