The Fed turned more hawkish at the recent FOMC meeting. With a rise in US Treasury yields, USD remained strong, which may restrain the AUD in the short term. On the other hand, the market may be over optimistic on US economic outlook. We maintain our stance of projecting two (not three) rate increases for 2017.
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With RSI in oversold territory, AUD/USD downside may be limited to 0.7145 and may range trade between 0.7145-0.7409 in the short term.