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Title: AUD/USD sits near monthly high, around 0.7000 mark as traders await US GDP report

July 28, 2022 04:43 AM ET

By: AnalysisWatch

The AUD/USD pair continues its sideways consolidative price action and remains confined to a range around the psychological 0.7000 level until early European trading.

The US dollar continues its downward trend from the previous day, triggered by the less aggressive remarks of Fed Chairman Jerome Powell, and slides to the lowest level since July 6. However, Powell hinted that another major adjustment could be forthcoming at the next monetary policy meeting in September, but that would depend on incoming data.

In addition, Fed officials acknowledged that economic indicators have weakened and are showing signs of slowing. This suggests that the Fed will slow the pace of its rate hikes, which continues to weigh on the greenback and is seen as an important factor providing some support to the AUD/USD pair.

However, investors remain concerned about the possibility of an economic downturn and have refrained from taking aggressive risks. This seems to be keeping traders from placing fresh bullish bets on the risk-sensitive Aussie and capping gains in the AUD/USD pair, which remains below its six-week high reached on Thursday.

The main focus on Thursday will be the release of the U.S. second quarter gross domestic product report, which is expected later in the day in North America. The data will have a significant impact on the USD exchange rate dynamics. Combined with the general risk sentiment in the market, this should boost the AUD/USD pair

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