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AUD/USD remains stuck in a range below 0.6900 handle, FOCM in focus

2019-06-19 19:55

  • Bulls fail to capitalize on the overnight bounce led by renewed trade optimism.

  • A subdued USD demand, despite recovering bond yields, extended some support.

  • The market focus remains on the latest FOMC policy decision, due later today.

The AUD/USD pair failed to capitalize on its early uptick to weekly tops and seesawed between tepid gains/minor losses through the mid-European session on Wednesday.

The pair struggled to build on the previous session's solid rebound from multi-month lows and remained capped below the 0.6900 handle as investors seemed to hold back from placing any aggressive bets ahead of the key event risk - the latest FOMC monetary policy update.

It is worth mentioning that the China-proxy Australian Dollar a goodish lift on Tuesday after the US President Donald Trump and his Chinese counterpart Xi-Jinping agreed to meet next week on the sidelines of G20 summit in Japan.

The uptick, however, lacked any strong bullish conviction, though a subdued US Dollar demand – despite a goodish pickup in the US Treasury bond yields, extended some support and led to a range-bound price action through the early part of Wednesday’s trading session.

Meanwhile, the US central bank is widely expected to leave interest rates unchanged but could lay the groundwork for interest rate cuts in coming months. With two rate cuts already priced in, any hawkish comments might reignite a broad-based USD rally and turn the pair vulnerable to resume its well-established bearish trend. 

Technical levels to watch


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