AUD/USD steadies above 0.76, FOMC is around the corner

After closing the day with modest losses near 0.7570, the AUD/USD pair took advantage of a relatively weaker greenback and optimistic tone of the RBA Governor Phillip Lowe to erase yesterday's losses. As of writing, the pair is moving sideways near 0.76 as investors are gearing up for the critical FOMC meeting.

Earlier today, the Reserve Bank of Australia (RBA) Governor Phillip Lowe said that the bank's next move was likely to be a rate hike rather than a cut if the economic growth was sustained. Lowe further added that the trade-war concerns and political developments in Italy could have a negative impact on the global economic growth. On Wednesday, unemployment report from Australia is going to be released during the Asian session and positive numbers are likely to help the aussie continue to gather strength against its rivals.

On the other hand, today's data from the U.S. showed that the PPI in May grew by 3.1% after recording a 2.6% growth in April and surpassed the market expectation of 2.6%. 

In a recently published research piece, TDS analysts share their views on today's FOMC meeting: “Risks are largely balanced, but another non-committal press conference from Powell could leave uncertainty elevated. A drift up in the 2018 or longer-run dots, or emphasis on hiking beyond neutral this cycle, would be seen as hawkish. Conversely, discussion of trade concerns or decelerating global growth would be viewed dovishly, as would additional support for a protracted inflation overshoot.”

Technical outlook

On the downside, the pair could encounter the first support at 0.7580 (50-DMA) ahead of 0.7500 (psychological level) and 0.7475 (May 29 low). Resistances are located at 0.7625 (Jun. 8 high/Jun. 12 high), 0.7665 (100-DMA) and 0.7715 (200-DMA).