AUD/USD remains steady around 0.7250, eyes on Wall Street, FOMC

• AUD/USD continues to trade in the positive territory near mid-0.7200s.
• Wall Street's main indexes remain on track to open higher.
• FOMC will announce policy decisions and release Summary of Economic Projection.

After starting the week on the back foot and posting losses on Monday and Tuesday, the AUD/USD pair managed to stage a rebound during the Asian session on Wednesday.

The People's Bank of China's (PBoC) decision to inject short-term cash provided a boost to risk sentiment and AUD capitalized on improving market mood. As of writing, the pair was consolidating its daily gains at 0.7250, where it was up 0.2% on a daily basis.

DXY moves sideways ahead of FOMC

On the other hand, the greenback stays relatively calm ahead of the US Federal Reserve's policy announcements. Currently, the US Dollar Index (DXY) is virtually unchanged on the day at 90.23.

The Fed is widely expected to leave its policy rate unchanged. However, investors will look for changes in the policy statement and the updated Summary of Projections that could potentially hint at the timing of asset tapering.

More importantly, FOMC Chairman Jerome Powell's press conference will be watched closely by market participants. A dovish tone is likely to weigh on the greenback while a hawkish policy outlook despite concerns over a global economic slowdown could trigger a DXY rally.

Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot.

In the meantime, Wall Street's main indexes remain on track to open decisively higher, suggesting that the USD could struggle to gather strength in the early American session.

Technical levels to watch for