AUD/USD retreats from daily highs post-Fed decision

Fed left rates unchanged at 5.00%-5.25% as expected.
An upwards revision of the median terminal rates hints at more hikes in 2023.
The AUD/USD faced volatility, initially retreating from 0.6835 to 0.6755, and then stabilized around 0.6800.

Patricio Martín FXStreet

The AUD/USD cleared part of its daily gains, retreating to 0.6800 after the Federal Reserve (Fed) decision to hold rates steady. Additionally, an upward revision of the terminal rate to 5.6% was confirmed, indicating the likelihood of two additional 25 basis points (bps) increases. In their statement, the Fed clarified that keeping rates unchanged during this meeting would enable the members of the Federal Open Market Committee to evaluate further information regarding its impact on monetary policy.

US yields recovered some ground as the Fed hinted at more hikes

Following the statement, the 10-year US bond yield recovered to 3.80%. On the other hand, the US stock market weakened, as all three major indices are in negative territory. The S&P 500 index (SPX) is seeing a 0.6% slide, the Dow Jones Industrial Average (DJI) a 1.19% loss, and the Nasdaq Composite (NDX) a 0.58% decrease.

For the following sessions, investors' assessment of the monetary policy statement, macro forecasts and Chair Powell’s comment will dictate the pace of the markets. That being said, the economic projections indicate a slower growth pace, a robust labour market and slower progress on inflation. Regarding the press conference, Powell focused on the need to pause following a consecutive 500 bps hike since last year to asses further information.

AUD/USD Levels to watch

According to the daily chart, the AUD/USD holds a neutral to bearish outlook for the short term as the bulls seemed to have taken a step back. However, technical indicators remain positive, indicating that the market may be preparing for another leg up.

If AUD/USD manages to move higher, the next resistances to watch are at the daily high at 0.6838, followed by the 0.6850 area and the psychological mark at 0.6900. On the other hand, the 100-day Simple Moving Average (SMA) at 0.6730 level is key for AUD/USD to maintain its upside bias. If breached, the pair could see a steeper decline towards the 200-day SMA at 0.6690 and the 20-day SMA at 0.6630.

AUD/USD Daily Chart

AUD/USD

Overview
Today last price	0.6793
Today Daily Change	0.0026
Today Daily Change %	0.38
Today daily open	0.6767

Trends
Daily SMA20	0.6621
Daily SMA50	0.6662
Daily SMA100	0.6736
Daily SMA200	0.6691

Levels
Previous Daily High	0.6807
Previous Daily Low	0.6738
Previous Weekly High	0.6751
Previous Weekly Low	0.6579
Previous Monthly High	0.6818
Previous Monthly Low	0.6458
Daily Fibonacci 38.2%	0.6781
Daily Fibonacci 61.8%	0.6764
Daily Pivot Point S1	0.6734
Daily Pivot Point S2	0.6702
Daily Pivot Point S3	0.6665
Daily Pivot Point R1	0.6803
Daily Pivot Point R2	0.684
Daily Pivot Point R3	0.6872

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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