AUD/USD closes in on 18-month highs near 0.7240

• AUD/USD continues to push higher toward mid-0.7200s on Tuesday.
• RBA Meeting Minutes showed that bank doesn’t see need for further policy easing.
• AUD/USD’s bullish momentum remains intact amid broad USD weakness.

The AUD/USD pair gained more than 60 pips on Monday and continued to edge higher during the first half of the day on Tuesday. As of writing, the pair was up 0.3% on the day at 0.7236, a little below the 18-month high it set at 0.7243 on August 5th.

RBA’s policy outlook lifts AUD on Tuesday

Earlier in the day, the Reserve Bank of Australia’s (RBA) August Meeting Minutes showed that the bank does not see a need to further ease policy. The statement further revealed that members acknowledge that the package of measures was working “broadly as expected” with an economic recovery underway in most of the country. Despite the heightened US-China geopolitical tensions, the AUD gathered strength against its rivals on the RBA’s remarks.

On the other hand, the poor performance of US Treasury bond yields continues to weigh on the greenback. With the 10-year US Treasury bond yield losing more than 2% for the second straight day on Tuesday, the US Dollar Index is down 0.32% at 92.53.

In the second half of the day, Building Permits and Housing Starts will be featured in the US economic docket. During the Asian session on Wednesday, the Westpac Leading Index will be released from Australia. Meanwhile, investors are likely to keep a close eye on fresh developments surrounding US-China relations.

Technical levels to watch for