AUD/USD corrects lower after running into resistance at 0.6935
- US Dollar off lows but still holds to most of the post-Fed losses.
- Australian Dollar losses strength as equity prices pull back from highs.
The rally of the AUD/USD pair that started after the FOMC meeting on Wednesday and pushed it back above 0.6900, run into resistance at 0.6935. As of writing, trades at 0.6915, 40 pips above yesterday’s close and still holding a bullish tone.
From a technical perspective, the area around 0.6935 is a strong barrier that if broken could lead to a test of the next critical level seen at 0.6950. On the flip side, the 0.6900 area has become a key support.
The move higher in AUD/USD was boosted by the dovish Fed meeting. The greenback accelerated the decline today as markets price in more rate cuts from the Fed. Data released today in the US came in mixed with a decline in jobless claims and also a larger-than-expected slide in the Philly Fed. The numbers were ignored by market participants that continue to focus on the implication of yesterday’s FOMC statement. In Australia, the central bank meets on July 2 and a rate cut is mostly discounted.
The rally in global stocks also added support to the pair, but over the last three hours it lost momentum and Wall Street indexes move off highs, favoring the correction in AUD/USD.
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