AUD/USD pares early losses, steadies around 0.7770
|- AUD/USD rebounds after dropping to 0.7730 area earlier in the day.
- US Dollar Index loses traction in the American session.
- Risk-averse market environment limits AUD/USD's upside ahead of RBA meeting minutes.
The AUD/USD pair dropped to a daily low of 0.7731 during the European trading hours but managed to stage a rebound in the second half of the day. As of writing, the pair was virtually unchanged on a daily basis at 0.7770.
Earlier in the day, the risk-averse market environment helped the greenback stay resilient against its rivals and didn't allow AUD/USD to gain traction. Additionally, the data from China showed that Retail Sales in April rose by 17.7% on a yearly basis, compared to analysts' estimate of 24.9%, and weighed on the China-sensitive AUD.
Nevertheless, AUD/USD reversed its direction in the American session amid the renewed selling pressure surrounding the greenback. The US Dollar Index, which turned positive on the day around 90.40, is currently losing 0.15% at 90.18.
On Tuesday, the Reserve Bank of Australia will release the minutes of its May meeting, at which the bank decided to leave its policy rate unchanged at 0.1%.
AUD/USD outlook
FX strategists at UOB Group think that AUD/USD is likely to trade between 0.7680 and 0.7830 for the next couple of weeks.
"AUD dropped sharply to 0.7688 last Thursday (13 May) before rebounding strongly on Friday," strategists said. "The sharp but short-lived swings have resulted in a mixed outlook and AUD is likely to trade within a broad 0.7680/0.7830 range for now.”
Technical levels to watch for
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