AUD/USD hits weekly highs above 0.7600 after Fed’s decision and retreats

AUD/USD broke above 0.7600 after the release of the FOMC statement and climbed to 0.7621 hitting the highest level since September 9 but then pulled back as the US dollar recovered strength in the currency market.

The pair was trading around the 0.7575 area before the decision and currently is hovering around 0.7590, 40 pips above Tuesday’s closing price. 

FOMC unchanged

The Federal Reserve, as expected, left interest rates unchanged at 0.25%-0.50%. Three members voted for a rate hike (only 1 did it at the previous meeting). The statement explicitly mentioned that the case for a rate hike has strengthened.

Regarding economic projections, members updated the ‘dot plot’ and now see 2 rate hikes during next year. The staff lowered its GDP growth forecast for the current year  to 1.7%-1.9% from June’s 1.9%-2.0%.

AUD/USD levels to watch

Regarding technical levels, immediate supports could be seen at 0.7555 (post Fed low), 0.7535 (daily low) and 0.7500 (psychological). On the flip side, resistance could be seen at  0.7620/25 (daily high), 0.7660 (Sep 9 high) and 0.7690 (Aug 26, Sep 7 high).