Australian Dollar bulls run into Oil wall amid looming Fed decision
The Aussie Dollar finished Tuesday’s session flat after bouncing off daily lows of 0.7204 but failed to sustain its gains as higher oil prices pushed the Greenback higher, leaving the Aussie Dollar nearly flat, according to the US Dollar Index (DXY).
Australian Dollar bulls found themselves challenged by the rising oil prices on Tuesday, as the US Dollar gained strength. The AUD/USD pair closed at 0.7219, barely edging flat despite a brief surge. Geopolitical tensions and inflation concerns are weighing on the Australian currency, as the Federal Reserve prepares to make a decision on interest rates.
The NY Fed Survey of Consumer Expectations indicated that households anticipate a decline in inflation expectations, while the NFIB Small Business Optimism Index remained above its long-term average. Analysts suggest that if July's economic data meets expectations, the Fed may hold rates steady in September, but ongoing geopolitical uncertainty could undermine such confidence.
Technical analysis points to a constructive bias for AUD/USD, with support near 0.7198 and resistance above 0.7050. The US Dollar remains under pressure due to a stronger Japanese Yen and expectations of a Bank of Japan rate hike. Meanwhile, the oil market shows mixed signals, with diesel prices surging despite calmer than expected conditions.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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