AUD/USD - off lows, Fed minutes cap losses

The downside in the AUD/USD pair following the release of the disappointing Australia capex figure has been capped by slightly dovish Fed minutes.

The pair dropped to a low of 0.7665 before recovering to 0.7683 levels.

Fed minutes show concern at greenback strength

Federal Reserve's latest meeting released overnight showed concern that a strong greenback could hurt the US economy. Furthermore, commentary in minutes appeared to downplay any near-term inflation risks.

As usual, the minutes carried the ambiguous language with respect to the timing of the next rate hike. Officials saw the need to raise interest rates "fairly soon" provided labour market data and inflation were in line or stronger than expectations.

Such confusing language against the backdrop of Trump bump has disappointed dollar bulls. Consequently, the AUD/USD pair was able to restrict losses to 0.7665 levels despite weak forward looking capex data.

AUD/USD Technical Levels

A break above 0.7704 (session high) would open doors for 0.7732 (Feb 16 high), above which the spot may target 0.7778 (Nov 8 high). On the other hand, a break below 0.7649 (Feb 21 low) could yield a pullback to 0.76 (zero figure), under which a major support is seen directly at 0.7511 (Jan 27 low).