DOW JONES FUTURES RISE AHEAD OF THE FOMC DECISION

The Australian dollar moved sideways after the latest consumer inflation data. According to the Australian Bureau of Statistics (ABS), the headline inflation rose to the highest level in over 20 years. This increase was mostly because of the rising cost of petrol, housing, and vegetables. It rose to 6.1% on a year-on-year basis and by 1.8% on a quarter-on-quarter basis. Therefore, analysts believe that these figures will put pressure on the Reserve Bank of Australia (RBA) to tighten its policy. The bank has already hiked interest rates by 135 basis points.

American futures rose on Wednesday as investors reacted to the relatively positive earnings by Microsoft and Alphabet. While Microsoft’s revenue and earnings missed analysts estimates, the company reiterated that its cloud computing sector was still vibrant. Alphabet’s quarterly revenue rose at the slowest rate in two years. Its revenue rose by 13% to $69.7 billion, missing estimates of about $70.8 billion. Its operating margins dropped to 28% while its net income fell to $16 billion from $18.5 billion. The company’s shares rose by over 4% in the premarket. More companies in the S&P 500 like Meta Platforms, Qualcomm, and Etsy will publish their quarterly results.

The US dollar retreated slightly as investors waited for the upcoming interest rate decision by the Federal Reserve. The bank is expected to hike interest rates by 75 basis points in its bid to fight the soaring inflation. The bank has already hiked interest rates by 150 basis points this year. Recent data showed that the country’s inflation rose by more than 9% as the cost of energy rose. Still, there are early signs that the country’s inflation is easing considering that gas and commodity prices have declined lately. Meanwhile, data published today showed that durable goods rose by 1.9% in June.

AUDUSD

The AUDUSD pair rose to a high of 0.6985, which was the highest level since June 22. The pair is trading at the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is below the overbought level. It has formed an ascending channel shown in yellow. Therefore, the pair will likely keep rising as bulls target the important resistance level at 0.6985.

EURUSD

The EURUSD pair rose to a high of 1.0165, which was the highest point since July 26. It has formed an ascending channel that is shown in yellow. It also moved slightly above the 25-day moving average while the Relative Strength Index (RSI) is approaching the overbought level. It moved to the 38.2% Fibonacci Retracement level. Therefore, the pair will likely resume the bearish trend as sellers target the lower side of the ascending channel.

XBRUSD

The XBRUSD pair moved sideways as traders watched the latest corporate earnings. The pair is trading at 100.38, where it has been in the past few days. It is at the 25-day moving average while the MACD moved to the neutral level. It has also formed a small inverted head and shoulders pattern. Therefore, the pair will likely continue rising as bulls target the key resistance at 102.