AUD/USD lacks clear directional bias in Asia as focus shifts to Fed minutes

• AUD/USD sees a two-way business in Asia as investors await Fed minutes. 
• The focus will be on Fed chief Powell's forward view on economy. 

AUD/USD is flatlined around 0.7244 at press time, having hit a high and low of 0.7260 and 0.7230 early Wednesday. The pair printed a 1-½ year high of 0.7265 on Tuesday. 

The lack of clear directional bias could be attributed to caution ahead of the release of the minutes from the July 28-29 Federal Reserve meeting. 

“Markets are chiefly concerned about the governor’s forward view. Employment and economic growth are the Fed’s main concerns, followed at a discrete rhetorical distance by inflation,” Joseph Trevisani, an analyst at FXStreet, said on Wednesday and added that, “any mention of the yield curve would be negative for the dollar.”

Speculation has been doing the rounds for months now that the Fed would adopt an RBA-style yield curve control program. Some observers think the central bank may signal greater tolerance for above-target (2%) inflation. 

While the uptrend in AUD/USD has stalled during the Asian trading hours, the probability of a big pullback ahead of the Fed appears low. That’s because risk sentiment remains strong despite lingering US-China tensions, fiscal and political uncertainty in the US. The S&P 500, Wall Street’s equity index, and a barometer for global equities, closed at a record high of 3389.78 on Tuesday. 

Technical levels