AUD/USD Price Analysis: Bearish bias remains, FOMC eyed for fresh impetus

• A subdued USD demand assisted AUD/USD to regain positive traction on Wednesday.
• The technical set-up favours bearish traders and supports prospects for further losses.
• Traders seemed reluctant to place aggressive bets ahead of the FOMC policy decision.

The AUD/USD pair refreshed daily tops during the early North American session, albeit quickly retreated few pips thereafter. The pair was last seen hovering around the 0.7700 mark, up nearly 0.25% for the day.

A subdued US dollar demand assisted the AUD/USD pair to defend a two-and-half-month-old ascending trend-line support and regain some positive traction on Wednesday. That said, nervousness ahead of the key FOMC monetary policy decision weighed on investors’ sentiment and kept a lid on any strong gains for the perceived riskier aussie.

Nevertheless, the AUD/USD pair, for now, seems to have stalled its recent rejection slide from a one-month-old descending trend-line resistance. The combination of two converging trend lines constitutes the formation of a symmetrical triangle on the daily chart, suggesting indecision among traders over the next leg of a directional move.

Meanwhile, technical indicators on the daily chart have just started drifting into the negative territory and support prospects for an eventual bearish breakdown. That said, it will still be prudent to wait for sustained weakness below the triangle support, currently around the 0.7675-70 region, before positioning for any further decline.

Some follow-through selling below the 0.7645 area or monthly swing lows touched earlier this month will reaffirm the negative outlook and turn the AUD/USD pair vulnerable. The next relevant support is pegged near the 0.7600 mark before bears eventually drag the major further towards YTD lows, around the 0.7530 region set on April 1.

On the flip side, any subsequent positive move is likely to confront stiff resistance near the 0.7730 horizontal zone. This is followed by the 0.7755-60 hurdle, which coincides with the top end of the symmetrical triangle and should now act as a key pivotal point for short-term traders.

A sustained strength beyond will negate the near-term bearish bias and prompt some aggressive short-covering move. The AUD/USD pair might then make a fresh attempt to conquer the 0.7800 round-figure mark and extend the momentum further towards the 0.7815-20 supply zone.

AUD/USD daily chart

Technical levels to watch