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AUD / USD Stable Above 0.7500, Lacks Continuation Ahead of FOMC Minutes

  • AUD / USD captures some new ones Wednesday amid subdued demand around the USD.
  • Nervousness around Covid-19 weighs on investor sentiment and limits the pair’s gains.
  • Investors also appear reluctant ahead of the release of the minutes of the FOMC’s monetary policy meeting.

The pair AUD / USD remains fstable just above the psychological level of 0.7500 during the first half of the European session on Wednesday, although it has lacked a strong continuation.

After the previous day’s sharp pullback of nearly 120 pips from near the 0.7600 level, the AUD / USD pair has managed to gain some positive traction on Wednesday. amid subdued demand for the US dollar. Expectations that the Fed will maintain its ultra-flexible policy stance for a longer period have continued to act as a headwind for the USD and have offered some support to the pair.

The USD has been further pressured by a further decline in Treasury yields Although the prevailing risk-off sentiment has helped limit any deeper losses. Concerns that the spread of the Delta variant highly contagious coronavirus could derail global economic recovery has continued weighing on investor sentiment. This, in turn, has limited the gains of the higher perceived risk AUD..

Market participants also seem reluctant and rather prefer to wait on the sidelines prior to the release of the minutes of the June FOMC meeting. As the Fed advanced its schedule for the first post-pandemic interest rate hike, investors will be looking for clues about the central bank’s monetary policy outlook. This will play a key role in influencing short-term USD price dynamics and could generate further directional momentum to the AUD / USD pair.

AUD / USD technical levels

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