AUD/USD tumbles to 0.7245 after FOMC statement

The AUD/USD pair tumbled after the release of the FOMC statement and printed a fresh daily low at 0.7244. The Aussie extended the bearish correction a  |  08/11/2018 20:09
  • AUD/USD extends reversal from 0.7300 after FOMC statement. 
  • Greenback rises across the board as Fed signals another rate hike in December. 

The AUD/USD pair tumbled after the release of the FOMC statement and printed a fresh daily low at 0.7244. The Aussie extended the bearish correction after hitting earlier at 0.7301, the highest level in a month. 

The move lower took place amid a rally of the greenback across the board following the Federal Reserve’s decision to keep rates unchanged at 2.00-2.25% range. The FOMC statement contained no major changes leaving the doors wide open for the fourth rate hike of the year, at the next meeting, in December. 

The greenback started to gain momentum and accelerated near the end of the US session. The US Dollar Index rose from 96.35 to 96.65, approaching to weekly intra-day highs. The DXY is having the best day in a week. US yields also moved to the upside. 

Technical outlook 

The AUD/USD pair rally that started at the beginning of the month from 0.7070 found resistance at 0.7300. The recent move lower could be seen as a correction but if it extends under 0.7170 (downtrend line recently broken) it could signal a potential peak. 

The short-term tone now favors the US dollar, particularly if AUD/USD consolidates under 0.7250. Below that level, it could correct further to 0.7210, the next relevant support. To the upside, the Aussie needs to break the 0.7300 barrier in order to clear the way to more gains. 

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