AUD/USD drifts lower to 0.7150 ahead of key AU data

After briefly testing daily highs in the boundaries of 0.7180, AUD/USD has then sparked a correction lower to the current 0.7155/50 band amidst some recovery in the buck.

AUD/USD looks to FOMC, data

Despite the ongoing correction lower, the weekly upside momentum remains well and sound around the pair, which is up for the second week in a row after meeting strong support in the mid-0.700s earlier in the month.

Spot will remain under pressure in the next hours in light of the publication of the FOMC minutes, where a somewhat dovish tone is expected and the Committee is also seen re-asserting the renewed flexible stance of the Fed.

The cautious tone is also expected to linger over AUD as the key labour market report is due early in the Aussie docket on Thursday along with advanced manufacturing/services PMI for the month of February.

What to look for around AUD

The Aussie Dollar stays on a cautious mood so far this week, while market participants keep waiting for headlines on the US-China ongoing trade talks in Washington. However, any serious bullish attempts in the Aussie Dollar are expected to remain somewhat unsustainable in light of the neutral stance from the RBA, prospects of lower GDP growth and even the potential of rate cuts should the outlook deteriorates.

AUD/USD levels to watch

At the moment the pair is losing 0.27% at 0.7143 and a breakdown of 0.7110 (10-day SMA) would aim for 0.7075 (low Jan.25) and finally 0.7054 (low Feb.12). On the flip side, the next hurdle emerges at 0.7176 (high Feb.20) seconded by 0.7223 (high Jan.11) and then 0.7270 (200-day SMA).