AUD/USD playing near 0.77 as risk appetite passes over the Aussie

The AUD/USD middled in Monday's trading and heads into the Asia session for Tuesday playing near 0.7700. The USD is retreating ahead of the US Fed's interest rate decision on Wednesday, but the Aussie couldn't capitalize on the weakness and was left on the low side while other currencies posted gains to counteract the recent hard selling on risk aversion brought about by potential trade wars on the global political stage.

All eyes on the Fed

The Fed's imminent rate hike will be the sixth rate hike since December of 2015, but with inflation fears coming to a head this January, more focus than usual is being drawn to interest rates, and aggressive moves could be in the pipe as central banks begin to buckle down and prepare to keep inflation restrained.

On the AUD side of life, the Reserve Bank of Australia (RBA) will be dropping their Meeting Minutes at 00:30 GMT early Tuesday, and traders will be looking for the reasoning behind the RBA's recent decision to drop the 3% growth target from their rhetoric at the last rate decision. The RBA has been keeping a heavy hand on Aussie interest rates thanks to a notable lack of confident macro figures, and the central bank is widely expected to keep rates lower until growth reaches a more acceptable level.

AUD/USD levels to consider

As FXStreet's own Valeria Bednarik noted, "Technically, the risk remains skewed to the downside according to the 4 hours chart, as indicators have barely bounced from extreme oversold readings, while the 20 SMA maintains a sharp bearish slope well above the current level."

Support levels: 0.7700 0.7665 0.7630

Resistance levels:0.7740 0.7775 0.7810