AUD/USD consolidates near multi-year tops, just above mid-0.7500s

• AUD/USD was seen oscillating in a range through the first half of the trading action on Wednesday.
• A softer tone surrounding the USD continued lending some support and helped limit the downside.
• Investors now seemed reluctant to place aggressive bets ahead of the latest FOMC policy decision.

The AUD/USD pair lacked any firm directional bias and remained confined in a narrow trading band, around mid-0.7500s through the Asian session.

The pair failed to capitalize on the previous day's goodish intraday bounce from the vicinity of the key 0.7500 psychological mark and witnessed a subdued price action on Tuesday. The downside remained well supported by a softer tone surrounding the US dollar, though bulls seemed reluctant ahead of the latest FOMC monetary policy update.

The USD Index languished near two-and-half-year lows amid the recent optimism over the rollout of vaccines for the highly contagious coronavirus disease. Adding to this, growing hopes for additional US fiscal stimulus measures before the end of the year further undermined the greenback and extended some support to the AUD/USD pair.

Despite the positive factors, investors refrained from placing aggressive bets, rather preferred to wait for the outcome of the two-day FOMC meeting that got underway on Tuesday. The Fed is scheduled to announce its decision later during the US session and is widely expected to keep the key overnight interest rate pinned near zero.

Meanwhile, the markets have been expecting that the US central bank will increase its bond-buying program. Hence, the key focus will be on the accompanying monetary policy statement and updated economic projections. Investors will further take cues from the Fed Chair Jerome Powell's comments at the post-meeting press conference.

Technical levels to watch