AUD/USD continues to push higher toward 0.7200

• AUD/USD is climbing toward 0.7200 after posting small losses on Monday.
• US Dollar Index stays in the negative territory below 93.50.
• AUD largely ignored mixed business sentiment data from Australia.

The AUD/USD pair closed the first day of the week with small losses and stayed relatively quiet during the Asian session. With improving market sentiment causing the USD to lose interest on Tuesday, the pair turned north and rose to a daily high of 0.7190. As of writing, AUD/USD was up 0.54% on the day at 0.7188.

AUD capitalizes on risk rally

Earlier in the day, the data published by the National Australia Bank (NAB) showed that Business Confidence in July slumped from 1 to -14. On a positive note, NAB Business Conditions improved from -7 to 0 and didn’t allow the AUD to come under bearish pressure.

On the other hand, the sharp upsurge witnessed in global equity indexes points out to a risk-on environment on Tuesday, which makes it difficult for the greenback to preserve its recent strength. Ahead of the Producer Price Index (PPI) data from the US, the US Dollar Index is down 0.4% on a daily basis at 93.24. Meanwhile, the S&P 500 futures are up 0.57% and a fresh rally in the US stocks could provide a boost to AUD/USD by putting additional weight on the USD’s shoulders.

On Wednesday, Westpac Consumer Confidence data for August will be featured in the Australian economic docket alongside the Wage Price Index figures for the second quarter. Until these data releases, risk perception is likely to continue to drive AUD/USD’s action. 

Technical levels to watch for