AUD/USD extends sideways grind above 0.7400 in the absence of fundamental drivers
- AUD/USD stays directionless, trades in tight range above 0.7400.
- US Dollar Index remains on track to post modest daily gains.
- Westpac Consumer Confidence will be featured in Australian economic docket.
The AUD/USD pair continues to fluctuate in a very tight channel above 0.7400 on Tuesday and stays virtually directionless. As of writing, the pair was down 0.03% on the day at 0.7418.
Earlier in the day, the data from Australia showed house prices in the third quarter rose more than expected. Additionally, the National Australia Bank's Business Confidence improved to 12 in November from 3 in October. Nevertheless, the AUD failed to capitalize on these data and allowed AUD/USD to stay in its range.
Focus shifts to US and China data
In the second half of the day, the US Dollar Index (DXY) rebounded modestly. However, the mixed performance of major equity indexes in the US and the lack of high-tier data releases suggest that the DXY's recovery is a technical correction and is likely to remain limited in the near-term. As of writing, the DXY was up 0.12% on the day at 90.91.
In the early trading hours of the Asian session on Wednesday, the Westpac Consumer Confidence Index will be the only data featured in the Australian economic docket. Furthermore, the Consumer Price Index (CPI) from China will be looked upon for fresh impetus. Markets expect inflation in China to arrive at -0.2% on a monthly basis in November and a higher reading could be assessed as a sign toward improving economic activity and help AUD gather strength.
Technical levels to watch for