AUD/USD advances following FOMC decision

The Federal Reserve’s decision to hold rates unchanged and to adhere to the US monetary policy projection from the previous year, which suggests 75 basis points (bps) of rate cuts in 2024, caused the Australian dollar to leap 0.83% against the US dollar on Wednesday. The pair trades at 0.6595, up 0.14%, early on Thursday as the Asian trading gets underway.

Wall Street performed noticeably positive by the end of the North African session, going up after the Fed’s announcement. The US Fed held the Federal Funds rate (FFR) between 5.25% to 5.50% and declared that both the labour market and the economy are strong.

Although the battle against inflation has progressed, the Fed’s recent careful rhetoric was validated by the PPI and CPI figures. Fed officials maintain their three rate cuts in 2024 in spite of this.

Developments on the US Dollar’s Front

The US 10-year Treasury note yields dropped 1.5 basis points to 4.277% after the data, and the US currency suffered. The 200-day moving average (DMA), a crucial dynamic support level that indicates a financial markets asset’s bullish or negative sentiment, is where the US Dollar Index (DXY), which measures the value of the dollar relative to other currencies, is seeking to cross below. The index fell 0.42% to land at 103.38, earlier on Wednesday, and slid further, early Thursday to 103.253 as at the time of writing.

Developments on the Australian Front

On the Australian front, the Judo Bank Manufacturing PMI for March decreased somewhat from the previous month’s 47.8 to 46.8, while the Services component increased from 53.1 to 53.5. From 52.1 to 52.4, the Composite March Judo Bank PMI increased.. While the services PMI increased from 53.1 to 53.5, the manufacturing PMI decreased from 47.8 to 46.8. The Composite Index increased from 52.1 to 52.4.

AUD/USD traders’ attention to more data from Australia, where an increase in employment of 40,000 persons is anticipated. As a result, the unemployment rate would drop from 4.1% to 4%. A high number would indicate that the Reserve Bank of Australia (RBA) should maintain its current position and dismiss rumours of a first-rate reduction in August.

Through the lens of technical analysis, the pair was breaking through important resistance levels and getting ready to cross the 0.6600 mark. That assertion is supported by the Relative Strength Index (RSI), which breaks four days of losses as it moves higher in bullish territory. The pair closes at weekly highs. The psychological 0.6650 barrier and the high of 0.6667 on March 8 would be the next supply zones. After cleared, 0.6700 would be shown.