AUD/USD tumbles below 0.6920 as market mood sours, Fed Powell eyed

The AUD/USD pair has witnessed a steep fall after slipping below the round-level support of 0.6940 in the Asian session. The asset is expected to display a bearish Double Distribution trading session. The major initiated the trading session with a minor consolidation and later the greenback bulls dragged the asset firmly. An intraday low of 0.6913 has been recorded at the press time and second inventory distribution is expected to take place later.

It looks like the positive minutes from the June monetary policy of the Reserve Bank of Australia (RBA) have failed to provide strength to the aussie bulls. As per the RBA minutes, the Australian economy doesn’t see any signs of recession on the current horizon. Household spending is resilient despite depreciated paychecks due to higher price pressures.

As per the minutes, the jobless rate is going to remain untouched while fixing the inflation mess, which indicates that the labor market in the Australian economy is extremely tight. A minor increase in the Unemployment Rate could be witnessed while addressing the inflation mess but that will be manageable. The only concern for the RBA is the lower wage growth rate, which is required to be accelerated at 3.5%.

Meanwhile, the US dollar index (DXY) is holding itself above Tuesday’s high at 104.60 as the negative market sentiment has rebounded. Investors are uncertain over Federal Reserve (Fed) chair Jerome Powell’s testimony, which is expected to bring more restrictive measures to contain the soaring inflation and on injecting liquidity into the economy.