AUD/USD extends daily slide, trades below 0.7350 ahead of American session
- AUD/USD is edging lower for the second straight day.
- US Dollar Index stays relatively calm around 92.50 on Wedensday.
- FOMC will release its Monetary Policy Statement at 1800 GMT.
The AUD/USD pair rose to a daily high of 0.7376 during the Asian trading hours but lost its traction in the European session. As of writing, the pair was losing 0.25% on the day at 0.7340.
Focus shifts to FOMC meeting
Earlier in the day, the data published by the Australian Bureau of Statistics showed that the Consumer Price Index (CPI) rose to 0.8% in the second quarter from 0.6%. This reading came in slightly higher than the market expectation of 0.7%. Additionally, the Reserve Bank of Australia's (RBA) Trimmed Mean CPI increased to 1.6% on a yearly basis in Q2 and matched analysts' estimates.
Although Australian inflation figures helped the AUD find some demand, AUD/USD failed to preserve its bullish momentum ahead of the FOMC's policy announcements.
In the meantime, the US Dollar Index, which closed the first two days of the week in the negative territory, is holding above 92.50 on Wednesday, forcing AUD/USD to stay in the red.
Previewing the FOMC's July policy meeting, "the Fed is set to hold firm with its bond-buying scheme and push back against any imminent tightening," said FXStreet analyst Yohay Elam. "The lack of action by the Fed does not mean stability in currency markets – printing more dollars for longer means a weaker greenback."
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Technical levels to watch for