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  • AUD/USD into fresh near-term highs as the Greenback slumps.
  • USD falls sharply as Fed’s Powell says policy rate is ‘just below’ estimates of neutral.

The AUD/USD surged late Wednesday after the US Federal Reserve’s Jerome Powell hit the newswires with a more-dovish-than-expected stance on IS interest rates, as well as the US domestic economy’s health overall, sending the US Dollar spiraling as traders raced to readjust their positions amidst a modified Fed outlook.

Fed’s Powell: No pre-set policy path; paying ‘very close attention’ to data

Fed chair Jerome Powell paved the way for a lack of continued forward guidance in Fed policy today, highlighting that the US Federal Reserve is not operating off of a ‘preset policy path’, noting that the world’s largest central bank is ‘watching the data’. The USD took a header as investors grappled with a Fed outlook that could include an early stop to the central bank’s rate hikes, as the Federal Reserve’s moves will now be entirely dependent on data releases looking forward, meaning more emphasis than usual will be placed on US economic data, including NFP, wages, quarterly GDP figures, and unemployment numbers.

For the Aussie, Private Capital Expenditures (CAPEX) data is due early Thursday at 00:30 GMT, and expected to print at 1.0% for the third quarter, compared to the previous quarter’s showing of -2.5%, but the Fed’s bomb-drop on a lack of clarity regarding future rate hikes will largely overshadow the Australian reading.

AUD/USD levels to watch

The Aussie heads into Thursday trading on a rapid rise, leaving the pair isolated in an extreme zone, and as FXStreet’s own Ross Burland noted: “AUD/USD has vaulted 0.73 the figure with ease over the dovishness in Powell’s speech. The next barrier is 0.7338 as being the 11-week high that guards a run towards the 200-D SMA at 0.7425 and confluence of the 38.2% Fibo of the 2018 highs to recent lows at 0.7443. On the flipside, the cluster of hourly SMAs around the session lows at 0.7220/30, with the confluence of the 21-D SMA at 0.7232 guards a break to the 50-D SMA at 0.7180  ahead of the 0.7164 recent lows that guard 0.7085 as the 10th Sep lows. 0.7020 are the 2018 lows.”

Pivot point support levels: 0.7200, 0.7162 and 0.7125.
Pivot point resistance levels: 0.7335.