AUD/USD rises further to the 0.7270 area ahead of FOMC minutes

• Aussei extends gains versus US dollar on American hours despite upbeat US data.
• DXY drops 0.30%, US yields modestly higher, below Tuesday’s highs.
• FOMC minutes to be released at 19:00 GMT.

The AUD/USD pair gained momentum during the American session and climbed to 0.7268, reaching the highest level since Monday’s Asian session. It remains near the top as traders await the release of the FOMC minutes.

The US dollar is falling across the board, unable to benefit from better-than-expected economic data. US yields remained below Tuesday’s top, still near monthly highs.

The AUD/USD is back near the 0.7275/80 resistance area that capped the upside last week. A break higher should clear the way for 0.7300. On the flip side, support emerges at 0.7240 and then 0.7220. A daily close under the 20-day moving average at 0.7190 would weaken Aussie’s outlook.

US data surpass expectations, FOCM minutes ahead

The ADP employment report for December came in above expectation with the private sector adding 807K jobs, against market consensus of 400K. The dollar initially rose but then weakened. Those numbers are seen as a preview for Friday’s Non-farm Payrolls.

Later on Wednesday, the Federal Reserve will release the minutes of its December meeting. Markets will be looking for clues for when the conditions for liftoff will likely be met.  WIRP suggests nearly 2 in 3 odds of liftoff March 16, while May 4 is fully priced in. Some are looking for clues to balance sheet reduction, but we think it is way too early for that”, said analysts at Brown Brother Harriman.

Technical levels