AUD/USD stays directionless around 0.6950 ahead of US data
|- AUD/USD is staying quiet around mid-0.6900s on Tuesday.
- Business sentiment in Australia improved sharply in June.
- US Dollar Index consolidates Monday's losses around 96.50.
The AUD/USD pair rose toward 0.7000 on Monday but lost its traction in the late American session to close with small losses at 0.6940. On Tuesday, the pair fluctuates in a tight range and was last seen gaining 0.22% on the day at 0.6955.
During the Asian session on Tuesday, the National Australia Bank (NAB) announced that the Business Confidence Index jumped from -20 in May to 1 in June. Moreover, the Business Conditions Index improved from -24 to -7 in the same period. Additionally, China reported that the Trade Surplus in June narrowed to $46.42 billion from $62.93 billion.
Meanwhile, heightened US-China geopolitical tensions over the South China Sea weighed on the market sentiment and didn't allow the AUD to capitalize on the upbeat data. Reflecting the dismal market mood, major European equity indexes are losing between 0.4% and 1.6% on Tuesday.
Eyes on Wall Street
On the other hand, the US Dollar Index (DXY), which closed the second straight trading day in the negative territory on Monday, is having a tough time staging a rebound and allowing the pair to cling to small gains.
Ahead of the US inflation report, the DXY is down 0.1% on the day at 96.45. Markets expect the annual core Consumer Price Index to rise to 0.6% in June. Nevertheless, investors are likely to ignore this data and remain focused on Wall Street's performance. A sharp drop in major equity indexes could help the USD gather strength as a safe haven and drag AUD/USD lower.
Technical levels to watch for
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