FxWirePro: AUD/USD firms , topside extension likely

• AUD/USD edged higher on Tuesday  as U.S. dollar remained under pressure from ongoing policy uncertainty linked to the Trump administration’s agenda.

• Investor confidence in the dollar has been dampened by concerns that aggressive fiscal and trade policies could increase market volatility and weaken growth expectations.

•Markets remain cautious amid rising risks of    renewed debate over potential threats to Federal Reserve independence.  These factors have increased political risk premiums on U.S. assets, reducing demand for the greenback and providing underlying support to the Australian dollar.

• Market attention is now firmly focused on the Federal Open Market Committee (FOMC) meeting scheduled for Wednesday. While no interest rate change is expected, investors will closely analyze Chair Jerome Powell’s post-meeting statement  .

•On the domestic front, Australia’s Q4 Consumer Price Index (CPI) data is also due on Wednesday. According to a Reuters poll, inflation is expected to rise 0.6% quarter-on-quarter and 3.6% year-on-year.

•  Immediate resistance is located at 0.6939(23.6%fib, any close above will push the pair towards 0.6966(Higher BB).

•  Support is seen at 0.6900(Psychological level) and break below could take the pair towards 0.6854(38.2%fib)

Recommendation: Good to buy around 0.6900 with stop loss of 0.6860, and target price of 0.6960