FxWirePro: AUD/USD remains buoyant, looks to extend gains

AUD/USD edged higher on Wednesday as U.S. dollar retreated following softer-than-expected U.S. June inflation data that eased expectations for near-term Federal Reserve rate hikes. Top Fed officials welcomed softer...

• AUD/USD edged higher on Wednesday as U.S. dollar retreated following softer-than-expected U.S. June inflation data that eased expectations for near-term Federal Reserve rate hikes. • Top Fed officials welcomed softer June inflation but said more evidence is needed to confirm inflation is easing sustainably.

• Improved risk appetite, driven by strong U.S. bank earnings and a rebound in chip stocks, also underpinned the Australian dollar. • Meanwhile, expectations for further policy tightening remained limited despite the Reserve Bank's three rate hikes since February..

• Markets currently price a 20% chance of an August rate hike and about a 60% probability by December. • Immediate resistance is located at 0.7009(50%fib), any close above will push the pair towards 0.7041(Higher BB).

• Support is seen at 0.6949 (SMA20) and break below could take the pair towards 0.6905(61.8%fib). Recommendation: Good to buy around 0.6970 with stop loss of 0.6710 and target price of 0.7050