AUD/USD sticks to modest losses, just below 0.7100 handle
• Disappointing Aussie housing market data prompts some selling on Tuesday.
• Bulls seemed rather unaffected by the release of the latest RBA meeting minutes.
• Subdued USD price action extends some support and helped limit deeper losses.
The AUD/USD pair maintained its offered tone through the early European session and remains within striking distance of daily lows, set earlier today.
The pair extended the overnight pull-back from over two-week tops and weakened further following the disappointing release of the Aussie house price index, which fell 2.4% q/q in the fourth quarter as against 2.0% drop expected.
Bullish traders seemed rather unimpressed by the latest RBA monetary policy meeting minutes, wherein the central bank noted significant uncertainties on the economic outlook and reiterated that there is no strong case for a near-term move in policy rates.
The pair dropped to an intraday low level of 0.7089 but remained support by the prevalent selling bias surrounding the US Dollar, which remained on the defensive amid growing market expectations that the Fed might opt for a more accommodative policy stance.
Hence, the latest FOMC monetary policy update, due to be announced on Wednesday, will play an important role in determining the pair's next leg of a directional move amid absent relevant market moving US economic releases on Tuesday.
Technical levels to watch
On a sustained weakness below the 0.7090-85 region, the pair is likely to accelerate the slide further towards 0.7060 intermediate support en-route the 0.7030 area and the key 0.70 psychological mark. On the flip side, the 0.7120 region now seems to have emerged as an immediate resistance, above which the pair is likely to accelerate the up-move towards testing 100-day SMA, around the 0.7160 region, before eventually aiming to reclaim the 0.7200 round figure mark.