FxWirePro: AUD/USD stays rangebound below 55-EMA amid cautious optimism ahead of Fed policy meet

Chart - Courtesy Trading View 

Spot Analysis:

AUD/USD was trading 0.05% lower on the day at 0.6933 at around 05:35 GMT

Previous Week's High/ Low: 0.6977/ 0.6784

Previous Session's High/ Low: 0.6983/ 0.6921

Fundamental Overview:

According to data released by the Australian Bureau of Statistics, overall inflation stood at 6.1%, minutely lower than the estimates of 6.2% but remained extremely higher than the prior release of 5.1%. 

Further, the trimmed CPI has increased to 4.9%, higher than the expectations and the prior release of 4.7% and 3.7% respectively.

With rising price pressures, the odds of a consecutive 50 basis points (bps) rate hike by the Reserve Bank of Australia (RBA) have advanced.

Focus now on the FOMC policy meeting. Markets have already priced in a  75 basis points (bps) rate hike by the Federal Reserve (Fed). 

Also, growing odds for a slowdown in the US economy will likely force Fed chair Jerome Powell to drop the option of a 1% rate hike announcement.

Hopes of positive solution from Thursday’s talks between Biden and Xi trigger cautious optimism ahead of Fed.

Technical Analysis:

- AUD/USD was struggling at 55-EMA resistance

- Stochs at overbought raise scope for pullback

- Price action is above 200H MA, volatility is high and rising

- Major trend is neutral, while minor trend is turning bullish

Major Support and Resistance Levels:

Support - 0.6887 (21-EMA), Resistance - 0.6964 (55-EMA)

Summary: AUD/USD was trading with a neutral bias. Decisive break above 55-EMA will fuel further gains.