AUD/USD sits near three-month tops, comfortably above 0.6900 handle
- Less hawkish FOMC prompted some aggressive USD selling on Wednesday.
- Trade optimism remained supportive, dismal Chinese data capped the upside.
The AUD/USD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading band just below three-month tops set earlier this Thursday.
The pair built on this week's goodish rebound from the vicinity of the 0.6800 handle and continued gaining some follow-through traction for the fourth consecutive session amid the post-FOMC selling bias surrounding the US Dollar.
Weaker USD remained supportive
As was widely expected, the Fed delivered a 25 bps rate cut on Wednesday and sent a clear signal of a possible extended pause, albeit indicated that it will need to see a significant move up in inflation before considering raising interest rates.
The lack of an explicit signal from the Fed that it is done with the current easing cycle was perceived to be less hawkish and was evident from the ongoing fall in the US Treasury bond yields, which continued weighing on the Greenback.
The bullish momentum was further supported by optimism over a partial US-China trade deal, albeit Thursday's dismal Chinese PMI prints turned out to be one of the key factors capping gains for the China-proxy Australian Dollar.
It will now be interesting to see if the pair is able to capitalize on its recent positive momentum or witness some long-unwinding trade as investors start repositioning for Friday's closely watched US monthly jobs report – NFP.
In the meantime, Thursday's US economic docket – featuring the release of core PCE price index, personal income/spending data and usual initial weekly jobless claims – might help grab some short-term trading opportunities.
Technical levels to watch