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  • AUD bulls struggle once again near 0.7265 region, as USD selling stalls.
  • Awaits fresh direction from the FOMC rate decision due tomorrow.

The AUD/USD pair picked up a bid in the European session and bounced-back to take-out the Asian highs at 0.7263, but in vain, as the bears continue to guard the last heading towards Wednesday’s FOMC decision.

Despite the recovery, the spot remains modestly flat, as escalating US-China trade concerns continue to undermine the sentiment around the proxy for the Chinese economy. More so, the monetary policy divergence is back into play, with the US Fed likely to hike the rates by 25 bps tomorrow when compared to RBA inaction expected until early next year.

Furthermore, a fresh rally in the 10-year US Treasury yields and positive open on the Wall Street dulls the attractiveness of the Aussie as an alternative higher-yielding currency.

Meanwhile, a positive surprise seen in the US CB consumer confidence numbers failed to have any impact on the dollar trades, all eyes stay focussed on the FOMC statement for fresh hints on the US interest rates outlook.

AUD/USD Technical Levels

According to FXStreet’s Chief Analyst Valeria Bednarik, “the  AUD/USD  pair trades between 0.7236 and 0.7263 since the day started, and the 4 hours  chart  shows that it’s holding below a mild bearish 20 SMA but above the 200 SMA, as technical indicators consolidate within negative levels, reflecting the lack of directional strength. A strong Fibonacci support comes at around 0.7220, with the downward potential increasing on a break below it. A recovery past 0.7260, on the other hand, will favor a retest of the 0.7300 figure.  Support levels: 0.7220 0.7190 0.7155. Resistance levels: 0.7300 0.7335 0.7370.”