AUD/USD consolidates last week’s gains, trades below 0.72

After gaining nearly 70 pips last week and closing at 0.7172, the AUD/USD pair inched higher in the Asian session but struggled to gather momentum. As of writing, the pair was posting small daily gains at 0.7177.

While speaking to reporters on the sidelines of the IMF and World Bank spring meetings in Washington over the weekend, “We’re hopeful that we’re getting close to the final round of concluding issues,” U.S. Treasury secretary Mnuchin said on the U.S.-China trade conflict and provided a boost to the risk appetite at the beginning of the week.

However, before the Reserve Bank of Australia releases the minutes of its April meeting in the Asian session on Tuesday, investors refrained from making large bets. Furthermore, retail sales, industrial production, and GDP data from China on Wednesday will be watched very closely to see if the Chinese economy is picking up steam as hinted by the upbeat PMI figures released earlier this month.

On the other hand, the US Dollar Index continues to move sideways in its tight daily range below the 97 handle, not allowing the pair to turn south. The only data from the U.S. today showed that the NY Fed’s Empire State Manufacturing Index improved to 10.1 in April from 3.7 in March but was largely ignored by the participants.

The pair could face the initial resistance at 0.7190/0.7200 (Apr. 12 high/psychological level) ahead of 0.7245 (Feb. 6 high) and 0.7295 (Jan. 31 high). On the downside, supports are located at 0.7160 (daily low), 0.7110/15 (20-DMA/50-DMA) and 0.7050 (Apr. 3/Apr. 2 low)./

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