AUD/USD retakes 0.79 handle and beyond, focus remains on FOMC

The AUD/USD pair trimmed some of the softer CPI-led losses and has recovered around 40-pips from session lows touched during the Asian session.

The pair ran through some fresh offers after the Australian headline CPI showed easing inflationary pressure and slipped below the RBA's medium-target. This coupled with a goodish US Dollar recovery dragged the pair below the 0.7900 handle.

The pair, however, regained traction near the 0.7880-75 support area amid a lack of any follow through USD demand. Adding to this, a subdued action around the US Treasury bond yields and mildly positive commodity prices extended additional support to higher-yielding/commodity-linked currencies - like the Aussie. 

The pair is now holding comfortably above the 0.7900 handle, as investors now look forward the much awaited FOMC decision, scheduled to be announced later during the NY trading session. In the meantime, the release of new home sales data from the US would be looked upon for some short-term trading impetus.

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Technical levels to watch

Momentum beyond 0.7935 level might continue to confront some fresh supply near 0.7970-75 region, above which the pair is likely to aim towards conquering the key 0.80 psychological mark. On the flip side, weakness back below the 0.7900 handle might continue to find fresh buying interest near the 0.7880-75 horizontal support, which if broken is likely to accelerate the fall towards 0.7825 horizontal support.