The dollar is holding firmer as we start the day and that is putting pressure on other major currencies now. AUD/USD has not enjoyed a good time to start the year, not helped by China woes as well in recent weeks. But in the case of yesterday and today, the post-Fed reaction is the key factor in play.
That is seeing the dollar post gains while equities slumped heavily, after Powell said that March is not the 'base case' for rate cuts.
As such, AUD/USD has now broken out of its mini-consolidation range. Sellers are now eyeing a test of its 100-day moving average (red line) at 0.6529. And that will be a key technical support level to watch out for before the end of the week.
Besides that, there is also the December low at 0.6525 that will help to add a defensive layer for the pair. However, that just means any break below both the 100-day moving average and the December low will be a strong signal for the downside momentum to extend.
It certainly looks like sellers have got the appetite to try and take a run at that later today. But as we look to wrap up the week, the US jobs report tomorrow will surely be the one to have the final say.
