- AUD/USD resumes its uptrend and hits session highs above 0.7000.
- The US dollar loses ground on Fed easing speculation.
- Aussie rally might extend beyond mid-term highs at 0.7024/32 – Credit Suisse
The Australian dollar has resumed its near-term uptrend on Wednesday, with the US dollar weighed by Fed easing speculation ahead of June’s monetary policy meeting. The pair bounced up from the mid-range of 0.6900 reaching session highs at 0.7019 before consolidating above 0.6985.
US Dollar loses ground ahead of Fed’s meeting
The AUD/USD appreciated on Wednesday against a softer US dollar. Market speculation that the US Federal Reserve might be considering to control the yield curve after the recent rise on US bonds has been weighing heavily on the US dollar, which depreciated against its main rivals on Wednesday.
Investors remain cautious, with all eyes on the outcome of a two-day Fed monetary policy meeting later today. The bank is widely expected to leave its benchmark rate unchanged at 0% – 0.25%until the economy shows clear signs of recovery from the coronavirus shutdown, but some investors anticipate that the Fed might introduce specific measures to hold down 10-year government bond yields.
AUD/USD: expected to break 0.7024/32, highs – Credit Suisse
The FX analysis team at Credit Suisse sees the AUD is consolidating near the current year highs at 0.7024/32 before resuming the uptrend, “An eventual sustained closing break above 0.7032 and then 0.7041 would further reinforce the view of a broader change in trend to the upside, with resistance then seen initially at July 2019 high and 78.6% retracement of the April 2019/March 2020 downfall at 0.7082/92, before the 61.8% retracement of the fall from 2018 at 0.7133/40.”
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