AUD/USD climbs to fresh daily highs above 0.6830

• Consumer confidence in December continues to deteriorate in Australia.
• Hopes of US delaying China tariff hike helps antipodeans find demand.
• FOMC is expected to keep its policy rate unchanged on Wednesday.

The AUD/USD pair fluctuated in a tight range above the 0.6800 handle during the Asian trading hours on Wednesday before starting to push higher ahead of the American session. As of writing, the pair was trading at a fresh daily high of 0.6833, adding 0.35% on a daily basis.

AUD buoyed by renewed trade optimism

Earlier in the day, the data from Australia showed that consumer sentiment weakened in December with the Westpac Consumer Confidence Index dropping to -1.9% from 4.5% in November and coming in worse than the market expectation of -0.7%. Nevertheless, the AUD largely ignored the disappointing reading and continued to stay resilient against its American counterpart.

Heightened hopes of the US delaying the December 15 tariff hike on Chinese imports seem to be helping risk-sensitive antipodeans find demand ahead of key macroeconomic events.

At the beginning of the American session, the Consumer Price Index (CPI) data from the US will be watched closely by investors. More importantly, the Federal Reserve will publish its updated economic projections alongside the monetary policy statement following its two-day meeting.

Although the FOMC is unlikely to cut its policy rate, the policy outlook for 2020 and FOMC Chairman Powell's comments could provide fresh clues regarding the possibility of one more rate cut in the short-term and cause the US Dollar Index, which was last seen moving sideways near 97.50, fluctuate wildly.

Technical levels to watch for