AUD/USD rises to two-week highs, 0.81 mark on sight ahead of Fed

The AUD/USD pair built on overnight strong up-move back above the key 0.80 psychological mark and touched near two-week high level of 0.8075 in the past hour.

The US Dollar held defensive through early NA session, in wake of a sharp retracement in the US Treasury bond yields and has been one of the key factors benefitting higher-yielding currencies - like the Aussie. 

Adding to this, the prevalent bullish trading sentiment around commodity space further underpinned commodity-linked currencies and remained supportive of the pair's strong bid tone.

Meanwhile, possibilities of some stops being taken out, on a sustained move above 0.8035 hurdle, might have also collaborated to the pair's steady rise since early European trading session.

Next on tap would be the release of existing home sales data, which is unlikely to provide any meaningful impetus as investors keenly await the highly-anticipated FOMC decision, due later during the NY trading session.

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The accompanying rate statement, and updated economic projections, would influence the already fragile sentiment surrounding the greenback and provide fresh directional impetus for the major.

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Technical levels to watch

Bulls could now be targeting for a move towards the 0.8100 handle, above which the pair seems all set to surpass 28-month high level of 0.8125 and head towards testing May 2015 swing highs resistance near the 0.8160-65 region.

On the flip side, any retracement back below mid-0.8000s could get extended towards 0.8030-25 horizontal support, below which the pair could drop back to the 0.80 handle.