AUD/USD hits 1-week lows at 0.6350

• The aussie makes a U-turn from 0.9490 and falls to a one-week low at 0.9350.
• Fed Powell takes a hawkish stance and drives the dollar higher.
• The dollar suffered after the dovish FOMC statement.

The USD faltered after the outcome of the Federal Reserve meeting. The aussie rallied to session highs just below 0.6500 following a dovish monetary release before tumbling to 0.6350 following Powell’s release.

Powell sides with the hawks and the dollar bounces

The dollar took a drastic turn after the comments of the president of the Fed, Jerome Powell, in the publication of the entity. Powell struck a hawkish tone to reporters, countering the impact of the previously released statement, and sending the dollar higher.

Jerome Powell refuted the idea that the bank might have tightened too much and reaffirmed the need to keep raising rates for policy to be tight enough.

Beyond that, he stated that economic data suggests that “we could reach higher levels than we anticipated at the September meeting,” which has curbed expectations of a moderate pivot in December.

As for the next meeting, Powell assured that there will be a debate as no decision has been made yet and the time to slow down rates could be as early as December or at the February meeting.

Previously, the FOMC statement stated that the pace of future rate hikes will be decided taking into account “the cumulative adjustment of monetary policy aria the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. “

The bank met expectations and raised rates by 75 basis points for the fourth time in a row, leaving the fed funds rate in the range of 3.75% to 4.00%.

Technical levels to watch