AUD/USD rises toward 0.7500 after FOMC minutes

AUD/USD gained momentum after the release of the FOMC minutes on the back of a decline of the US dollar across the board. The pair rose from 0.7470 and climbed to 0.7496, hitting a fresh daily high. 

According to the minutes, more data is needed before confirming that the recent weakness seen in the US economy was transitory. FOMC members agreed that the new plan regarding the balance sheet should be announced soon and it would be appropriate to start with reductions this year. 

FOMC minutes: Fed policymakers agreed that details of balance sheet plan should be announced soon

Market expectations of a June rate hike, according to the CME Group FedWatch Tool rose from 75.8% to 80.0% after the minutes. Despite the expectations, US bond yields dropped weakening the greenback in the market. 

Levels to watch 

The pair has been able to erase Asian session losses. The downgrade affected the AUD/USD that dropped to 0.7440. An uptrend line offered support to the Aussie that rebounded. That trendline comes from May’s lows, has become a key dynamic short-term support. Currently, it stands at 0.7445; a break lower would remove the bullish bias out of the AUD/USD. As long as it remains on top of that line, the bias will favor the upside. 

Above 0.7500, resistance levels might be located at 0.7515 (weekly high), 0.7550/55 (May 2 high) and 0.7585 (Apr 24 high).