Much of the focus on Wednesday was on the FOMC announcements, where the Fed raised their target interest rate by 0.25% but continued to see only two more rate hikes this year for a total of three. The announcement invoked a retracement in the U.S. Treasury bond yields, which benefits higher-yielding currencies such as the Aussie (AUD).
Although AUD/USD was higher on the FOMC announcement, the pair failed to build on the gains after disappointing Australian unemployment data released overnight. The unemployment rate increased to 5.6%, from an expected 5.5% and the economy only added 17.5K new jobs, from 20K expected. The Reserve Bank of Australia will likely wait for better growth figures before moving on any monetary policy change.
On the 4-hourly chart, AUD/USD failed to break resistance at 0.7780 and is now reversing into support at 0.7725. A break could open the way to a test of the trend line support at 0.7670, followed by 0.7625. On the upside, a sustained move back above 0.7780 could lead to a fresh attempt at the 200MA near 0.7820, before testing the falling resistance trend line at 0.7875.
AUDUSD 4-Hour Chart
On Wednesday, the Reserve Bank of New Zealand (RBNZ) announced their decision to leave interest rates at a record low 1.75%, for a sixteenth-straight month. This was accompanied by a broadly neutral statement.
On the 4-hourly chart, NZD/USD broke the important 0.7200 level but recovered sharply from the daily 200MA near 0.7150. Continued bullish momentum and break of the 38.2% Fibonacci retracement at 0.7260 could open the way to a test of the 61.8% retracement at 0.7296, followed by a test of the falling resistance trend line. However, a reversal and break of 0.7200 could lead to a return to the lows at 0.7150.
NZDUSD 4-Hour Chart