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  • AUD/USD lost its traction after edging higher in the Asian session.
  • US Dollar Index stays quiet above 90.00 on Wednesday.
  • FOMC Chairman Powell will testify before House Financial Services Committee.

The AUD/USD pair closed flat on Tuesday and climbed to its highest level in nearly three years at 0.7945 during the Asian trading hours on Wednesday. However, the pair struggled to preserve its bullish momentum and erased its daily gains. As of writing, AUD/USD was virtually unchanged on the day at 0.7910.

DXY remains on the back foot following Tuesday’s recovery 

The US Dollar Index (DXY) closed in the positive territory and snapped a three-day losing streak on Tuesday but struggled to extend its rebound following FOMC Chairman Jerome Powell’s dovish remarks. Powell reiterated that they won’t react to one-time increases in inflation and said that they will keep the policy accommodative. Currently, the DXY is posting small daily losses at 90.14.

Later in the day, Powell will deliver his remarks on the second day of his semi-annual testimony, this time before the House Financial Services Committee. New Home Sales for January will be the only data featured in the US economic docket.

The data published by the Australian Bureau of Statistics revealed on Wednesday that the Wage Price Index in the fourth quarter rose to 0.6% from 0.1% in the third quarter and beat the market expectation of 0.3%. Nonetheless, the market reaction to this report was muted. On Thursday, Private Capital Expenditure data for the fourth quarter from Australia will be looked upon for fresh impetus.

Technical levels to watch for

 

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