The pair will likely continue rising ahead of the FOMC minutes.
- Buy the AUD/USD pair and set a take-profit at 0.6725.
- Add a stop-loss at 0.6585. Timeline: 1-2 days.
- Sell the AUD/USD pair and set a take-profit at 0.6570.
- Add a stop-loss at 0.6700.
The AUD/USD price was little changed on Wednesday as investors waited for the upcoming American economic data and FOMC minutes. The pair was trading at 0.6636, which was slightly higher than this week’s low of 0.6587.
FOMC minutes ahead
The AUD/USD price has tilted lower in the past few days after peaking at 0.6800 last week. This decline happened as the market waited for the upcoming FOMC minutes. The minutes are expected to show the deliberations that Fed officials had in its previous meeting. In it, the bank hinted that it will continue hiking interest rates in the coming months.
The pair also reacted mildly to the decision by the Australian parliament to ratify free trade agreements with the UK and India. The deal with the UK has been relatively controversial because it is seen to favor Australia. For example, it will eliminate 99% of all tariffs of goods exported to the UK from Australia.
The AUD/USD price will next react to several important economic data from the United States later today. For example, the statistics agency will publish the closely watched housing numbers. New home sales are expected to drop to 570k as interest rates rises. Building permits, on the other hand, are expected to have dropped to a seasonally adjusted 1.51 million in October.
The US will also publish the latest durable goods order numbers. Economists surveyed by Reuters expect the data to show that core durable goods orders rose from -0.5% in September to 0.1% in October.
Still, while these numbers are important, they will not change the next actions by the Federal Reserve. Analysts expect that the Fed will maintain interest rates at an elevated level. In her statement on Tuesday, Loretta Mester said that the bank will want to see more positive inflation numbers before it starts lowering rates.
The AUD/USD price dropped to a low of 0.6587 on Tuesday, which was the lowest level since November 11. It rebounded to a high of 0.6635, which is below this month’s high of 0.6800. The pair has moved below the middle line of the Bollinger Bands while the Stochastic Oscillator has is pointing upwards.
It is also above the important support level at 0.6518, which was the highest point on October 27. The pair will likely continue rising ahead of the FOMC minutes. This could see it retest the important level at 0.6725.