Author: Mr Amar – Technical Analyst

The port-pegged US dollar gave up a good chunk of gains over the past 24 hours following the minutes of the FOMC meeting. This allowed sentiment-sensitive currencies like the Australian dollar to find strength late in the session on Wednesday. It seems that the most important takeaway from the minutes of the May 3rd and 4th Fed meeting was not what was said, but what was left out. The document offered no immediate indication that politicians could become more aggressive outside of current expectations. In fact, there were signs that the central bank might even halt its current rate-hike cycle in the fall.

It is worth noting that fears of a global recession stemming from the crisis in Ukraine and Russia, recently endorsed by World Bank President David Malpass, are also dragging AUD/USD rates lower. Russia’s war in Ukraine and its impact on food and energy prices and fertilizer availability could trigger a global recession. On Wednesday, Federal Open Market Committee (FOMC) minutes mentioned that policymakers backed the idea of ​​50 basis points rate hikes for only the next two meetings, and asked questions about the trajectory of rate hikes last September, which in turn raised the question Fall was the preferred mood.

AUD/USD sellers are attacking a 2-week uptrend line around 0.7070 before targeting levels near 0.7040. Meanwhile, recent high around 0.712530 is challenging the bulls. The bears attempted to take control below the rising wedge, but the bulls held on to the horizontal support and carried the bears back into the rising channel.