AUDUSD Powell will clear the path!

AUD/USD-Maintains heavy tone in narrow Asian range
• AUD/USD traded in a 0.6919/31 through the Asian morning
• Weak Aus consumer confidence sent AUD/USD to a session low
• Buyers ahead of 0.6915 underpinned and it settled 0.6925 into the afternoon
• AUD/USD support at 61.8 of 0.6832/0.7048 move at 0.6914
• Resistance at the 21-day MA at 0.6949 and break ease downward pressure
• Consolidation likely ahead of Powell testimony before the House later today
• AUD/USD could break either way depending on Powell's tone

Comment:

AUD/USD needs a 'Powell put' to avoid deeper slide
The AUD was the worst performing major currency on Tuesday, with AUD/USD falling to a near three-week low at 0.6919. The AUD/USD has shown vulnerability to the rise in U.S. yields, as the market hedges bets on an aggressive start to the Fed's easing cycle following Friday's surprisingly strong U.S. payroll data. Fed Chair Jerome Powell testifies to the House later today and if he doesn't clearly signal a rate cut at the July 30-31 meeting, the AUD/USD will suffer from a double-whammy of higher U.S. yields and a likely fall in risk assets. A less dovish-than-expected testimony could see the AUD/USD make tracks towards the June 18 low at 0.6832. Powell faces the delicate challenge of conveying a relatively upbeat outlook for the U.S. economy, while avoiding an inevitable tantrum by a market that is fully pricing in a 25bps rate cut to 2.00-2.25%. If the Fed chair manages to convince the market the Fed still has its back and leaves the door open for an insurance cut on July 31, the AUD/USD will likely stage a relief rally towards the 100-day MA around 0.7025.