AUD/USD holds the lower ground below 0.7750 ahead of US data, Fed

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  • AUD/USD consolidates the retreat from multi-day tops.
  • Aussie CPI beats estimates, DXY attempts a bounce, S&P 500 futures drop
  • The market mood remains tepid ahead of US durables and FOMC.

AUD/USD is feeling the pull of gravity once again, as the US dollar bulls are back in charge in the European session. The spot stalled its tepid bounce just shy of the 0.7750 barrier, now revisiting daily lows near 0.7730.

The renewed downside in the spot could be attributed to a fresh leg higher in the US dollar against its main peers, as the European equities kick-off Wednesday on a negative note and added to the risk-averse market conditions.

A dip in the French and German consumer confidence seems to weigh on the market mod while traders turn cautious ahead of the key Federal Reserve (Fed) monetary policy decision. The S&P 500 futures drop 0.13% to trade around 3,835 points. 

Meanwhile, upbeat Australian Q4 CPI data keeps the aussie bulls alive above the 0.7700 level. The spot hit a three-day high of 0.7764 after the OZ nation’s CPI beat estimates with 0.9% QOQ in Q4 2020.

Attention now turns towards US durable goods data and the Fed decision for fresh trading impulse. The Fed is likely to keep the monetary policy settings unchanged this month.

“However, Fed’s chairman Jerome Powell’s comments on potential changes in the central bank’s bond-buying program could inject volatility into the markets,” Omkar Godbole, FXStreet’s Analyst notes.

AUD/USD technical levels

FXStreet’s Analyst Anil Panchal explained, “a 200-HMA level of 0.7725 is likely to offer a tough barrier for the bear’s entry targeting the monthly low around 0.7640. Also acting as a downside filter is January 18 bottom surrounding 0.7660 and the 0.7700 threshold. On the flip side, a clear break of the recent high near 0.7765 defies the bearish candlestick formation and will restore the upside momentum targeting the fresh multi-month high above the 0.7800 round-figure.”

AUD/USD additional levels

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