AUD/USD drops back to the 0.6400 zone ahead of Fed’s decision
02.11.2022, 15:27

AUD/USD drops back to the 0.6400 zone ahead of Fed’s decision

  • US dollar gains momentum ahead of the FOCM statement.
  • Fed expected to raise interest rates by 75 bps.
  • AUD/USD moving sideways, without a clear direction.

The AUD/USD is hovering around 0.6400 ahead of the FOMC statement. The pair pulled back during the American session after finding resistance at the 0.6430 area amid a stronger US dollar. Recently bottomed at 0.6396.

All up to the Fed

At 18:00 GMT the Federal Reserve will announce its decision on monetary policy. A 75 bps rate hike is expected. Analysts will look into the statement and the press conference (18:30 GMT) for clues about the future interest rate hike trajectory.

“Chair Powell is likely to leave open the possibility of another 75bp hike in December. We think the Fed will want to see service inflation moderating before reducing the pace of its tightening”, explained analysts at ANZ.

Earlier on Wednesday, ADP reported an increase in private payrolls during October by 239K, surpassing expectations. The number had a moderate impact on market. On Friday, the US official employment report is due.

What the Fed says will likely define the direction of AUD/USD. The pair is moving sideways with a neutral outlook in the short term. A slide below 0.6340, would increase the bearish pressure, exposing 0.6250/60. On the upside, above 0.6450, the aussie could gain momentum and the crucial resistance is located around 0.6530.

Technical levels

 

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