AUD/USD Price Analysis: Holds above the 0.6760 area, investors await Fed decision

• AUD/USD recovers some losses and holds above 0.6765.
• The key resistance level is located at 0.6800; the strong support level is seen at 0.6700.
• The Relative Strength Index (RSI) hovers around 50, indicating the non-directional movement of the pair.

The AUD/USD pair recovers its recent loss and edges higher beyond the 0.6770 mark heading into the early European session on Wednesday. At the time of writing, the pair is trading at 0.6771, losing 0.30% for the day.

On Wednesday, the Australian Bureau of Statistics (ABS) reported that the country's Consumer Price Index (CPI) rose 0.8% in the second quarter of 2023, compared to a 1.4% increase in the first quarter and the market consensus of 1.0% growth. The pair accelerates declines towards 0.6700 following the data and then recovers some losses as Australian Treasurer Jim Chalmers said there is still a long way to go to combat inflation. Still, it is heading in the right direction.

However, market players await the Federal Open Market Committee (FOMC) meeting and Fed Chairman Jerome Powell's press conference for further guidance for the entire year.

From a technical perspective, if AUD/USD extends its gains past 0.6775 (the lower limit of the Bollinger Band) on the one-hour chart, the next resistance level would be 0.6800. The mentioned level represents the confluence of a psychological round mark, the upper boundary of the Bollinger Band, and a high of July 25. A break above the latter would expose to 0.6820 (Low of July 20), en route to 0.6845 (High of July 20), and finally to 0.6860 (Low of July 14).

On the flip side, any extended weakness below the July 25 low of 0.6750 will challenge the next contention at 0.6700 (High of July 7, a psychological round figure). Further south, the next stop of the AUD/USD is located at 0.6650 (Low of July 11).

It’s worth noting that the pair's momentum seems to be directionless for the time being as the Relative Strength Index (RSI) hovers around 50.

AUD/USD one-hour chart