AUD/USD consolidates losses, remains above 0.79 ahead of FOMC

After falling to a fresh 3-day low at 0.7877 during the European morning, the AUD/USD pair retraced the majority of its daily losses but lost its momentum at 0.7925. As of writing, the pair is trading at 0.7910, losing 0.33% on the day.

The AUD lost strength against its peers during the Asian session after the data from Australia showed that the Consumer Price Index eased to 0.2% from 0.5% on a quarterly basis in the second quarter. Following the data, Philip Lowe, Governor of the Reserve Bank of Australia, in a speech argued that it would be better if the AUD was a bit lower and added that higher power prices were hurting the businesses and the investment.

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However, the risk-on mood helped the commodity-linked aussie start recovering its losses ahead of the FOMC's monetary policy decisions later in the NA session. On the back of the solid performance of Asian and European stock indexes, Wall Street started the day higher with the Dow Jones Industrial Average adding 0.5% and the S&P 500 gaining 0.2% in the opening hour of the session. 

Despite today's retreat, the pair is trading in a relatively narrow range since the start of the week and could find the next catalyst later in the session when the FOMC releases its monetary policy statement. The general consensus is that the FOMC will refrain from making any major changes to June's press statement.

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Technical outlook

0.80 (psychological level) remains as the first critical resistance ahead of 0.8075 (Apr. 29, 2015, high) and 0.8160 (May 14, 2015, high). On the downside, supports are located at 0.7875 (daily low), 0.7775 (20-DMA) and 0.7645 (50-DMA).