AUD / USD remains below 0.7700, on track to record the lowest daily close in 12 days

• AUD / USD appears to close below 0.7700 on Tuesday.
• Risk aversion is weighing on the AUD during the US session.
• The FOMC will announce the policy decision and publish the Summary of Economic Projections on Wednesday.

The pair AUD/USD It fell towards 0.7700 during European trading hours and extended its decline in the second half of the day to a fresh 11-day low of 0.7674. At the moment, the pair is down 0.37% on the day to 0.7682 and remains on track to post its lowest daily close since June 3.

Earlier in the day, the cautious tone seen in the minutes of the June meeting of the Reserve Bank of Australia made it difficult for the AUD to find demand. In evaluating the RBA release, “the RBA Minutes noted that it would be premature to end QE,” said analysts at TD Securities. “Our call is for the RBA to deliver another A $ 50 billion in QE over 6 months. At the same time, however, we believe that RBA can also seek more flexibility. “

Focus shifts to FOMC policy meeting

On the other hand, US data revealed that the Producer Price Index for final demand rose to 6.6% annually in May from 6.2% in April, beating the market consensus of 6.3%. Additionally, the US Census Bureau reported that Retail Sales in May decreased by 1.3% following the 0.9% growth in April (revised from 0%).

Following the mixed data, the US Dollar Index (DXY) rose to a monthly high of 90.67 but struggled to maintain its bullish momentum and investors refrained from taking large positions ahead of the FOMC policy announcements on Wednesday.

With a preview of this event, “the Federal Reserve is ready to release updated forecasts, which are set to trigger the initial market reaction, potentially one that is positive for the dollar,” the analyst said. FXStreet, Yohay Elam. “Fed Chairman Powell could cautiously curb such gains, especially if he rejects any early withdrawal of the stimulus.”

Technical levels