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Currencies move cautiously ahead of Fed meeting

Most of the major currencies moved cautiously on Tuesday, especially the Australian and New Zealand dollars, as investors waited for guidance on whether the Federal Reserve would begin to reduce its monetary support, while negative coronavirus developments weighed on the performance of risk appetite in the markets.
The AUDUSD pair fell 0.09% to $0.7375 in a quiet trading session. Investors were reluctant to place big bets ahead of this week’s Federal Reserve meeting, which is expected to provide clues to the outlook for US monetary policy.
The Australian dollar has also been overshadowed by a surge in COVID-19 cases in Australia, which some fear will lead to further restrictions and hamper the country’s economic recovery.
Strategic analysts at the Commonwealth Bank of Australia said in a note that the Covid-19 situation in Australia will remain a strong headwind for the Australian dollar in the near term. On the other hand, the state of New (NYSE:NIO) South Wales said on Tuesday that cases of the new Corona virus rose daily to a 16-month peak, threatening to tighten or extend restrictions in the most populous state.
The Australian dollar AUD/USD maintained its trading range for the month of July between $0.7599 and $0.7289. The immediate resistance is at the $0.7400 level, with support around the $0.7300 level. The New Zealand dollar fell, causing the NZDUSD pair to fall 0.13% to $0.06988.
While the Australian currency is buoyed by a strong economy and a hawkish central bank, recent strength in the US dollar and concerns about a rise in global COVID-19 infections have kept the kiwi range-bound over the past month.

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