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  • AUD/USD goes into a consolidation phase on Wednesday.
  • US Dollar Index extends losses for the fourth day.
  • Coming up: Manufacturing PMI data and the FOMC announcements.

The AUD/USD pair is consolidating this week’s gains above the critical 0.70 mark on Wednesday as the trading action turns subdued amid the Labour Day holiday. At the moment, the pair is virtually unchanged on a daily basis at 0.7050.

Despite the thin trading volume, however, markets are expected to wake up in the second half of the day as investors are waiting eagerly for the final April Manufacturing PMI data from the United States and the FOMC’s monetary policy decisions. Ahead of these key events, the US Dollar Index is losing 0.15% on the day at 97.38.

Previewing the Fed meeting and the market’s potential reaction, “we think the Fed still feel they are at a good place and don’t think they will want to signal a different view on policy going forward. Market reactions should therefore be muted,” Nordea Markets analysts argued.

FOMC Preview: What 14 major banks are expecting from today’s meeting?

In the remainder of the week, the Australian economic docket won’t be offering any significant data and the greenback’s market valuation is likely to remain as the primary driver of the pair’s price action.

Technical levels