#AUDUSD @ 0.68590 The US Federal Reserve hiked rates by 50 bps, and the tumbled from around 0.6880s toward its day’s lows. (Pivot Orderbook analysis)

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• The US Federal Reserve hiked rates by 50 bps, and the AUD/USD tumbled from around 0.6880s toward its day’s lows.
• Federal Reserve policymakers expect the Federal Funds rates to peak around 5.1%.
• AUD/USD: Break below 0.6800 can exacerbate a fall toward the 20-DM; otherwise, a rally above 0.6900 is on the cards.

The pair currently trades last at 0.68590.

The previous day high was 0.6893 while the previous day low was 0.674. The daily 38.2% Fib levels comes at 0.6835, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6799, expected to provide support.

The AUD/USD dropped from daily highs nearby 0.6900, toward its daily lows of 0.6820, following the US Federal Reserve (Fed) monetary policy decision on Wednesday, with Jerome Powell and Co., raising rates by 50 bps, as most analysts expected. However, the monetary policy statement remained unchanged from November’s. Therefore, the AUD/USD is trading volatile, around 0.6800/20, at the time of writing.

The Federal Reserve Open Market Committee (FOMC) made the widely anticipated decision to raise the Federal Funds rate (FFR) toward 4.25-4.50%. The US central bank decision was spurred by a tight labor market and inflation reflecting various supply and demand imbalances due to the pandemic, higher food and energy prices, and broader price pressures. Officials noted that further increases in policy are needed for inflation to return back over to the 2% target and stated that “cumulative tightening of monetary policy,” inflation, and economic and financial developments, to achieve the Fed’s target.

According to the Summary of Economic Projections, Federal officials predict a “terminal” rate average near 5.10%, with GDP anticipations at 0.5% for both 2022 and 2023; inflation is expected to reach 3.5% by 2023 before declining further in future years down toward the 2% US central bank, target.

Source: Federal Reserve

The AUD/USD tumbled from around 0.6875 toward its daily low of 0.6818 on the release of the monetary policy statement, though it had erased some of its losses, but remains volatile as the Federal Reserve Chair Jerome Powell takes the stance.

A fall below 0.6800 could pave the way toward the 20-day Exponential Moving Average (EMA) at 0.6726. On the upside, a rally above 0.6900 could be expected if Powell turns more dovish as expected.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6835 at the time of writing. Pair opened at 0.685 and is trading with a change of -0.22 % .

The pair is trading above its 20 Daily moving average @ 0.6731, above its 50 Daily moving average @ 0.6539 , above its 100 Daily moving average @ 0.6677 and below its 200 Daily moving average @ 0.6905

The previous day high was 0.6893 while the previous day low was 0.674. The daily 38.2% Fib levels comes at 0.6835, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6799, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6762, 0.6675, 0.6609
• Pivot resistance is noted at 0.6915, 0.6981, 0.7069

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