AUD/USD holds 0.7740 ahead of Fed’s minutes

• The US core inflation increased to 2.1% year-on-year above Fed’s target.

• The Fed’minutes are scheduled at 18:00 GMT. 

• The AUD/USD is consolidating below the 0.7770 level at two-week’s highs.

The AUD/USD is trading at around 0.7750 down 0.13% on Wednesday as the US Consumer Price Index  rose to 2.1% over the year in March from 1.8% in February. The data is above the 2% Federal Reserve’s price stability target and therefore seen as hawkish for the Federal Reserve. 

Investors are now shifting their focus to the release of the FOMC minutes’report, which will disclose what was discussed at the last Fed meeting. Investors should expect potential volatility around the event which is scheduled at 18:00 GMT. 

Overnight in Australia, the Westpac Consumer Sentiment Index fell to -0.6% in April from 0.2% in March. The Chinese inflation data also disappointed. The Chinese Consumer Price Index year-on-year to March fell to 3.1% from 3.7% the month earlier. Analysts were expecting 2.6% this month. As Australia is a key trading partner with China, the Chinese data have a direct impact on the Australian economy and the Australian Dollar. The news prompted some profit taking as the pair is momentarily capped at the 0.7710 high made in the Asian session. The FOMC minutes will likely offer some directionality.

AUD/USD 4-hour chart

Support lies at 0.7728, previous swing and at 0.7691 demand level. Resistance is seen at 0.7710 which is the high made on Tuesday and further up at 0.7845 swing low on March 13.