AUD/USD sticks to small daily gains above 0.74

• Upbeat pending home sales data fail to revive USD bulls.
• US Dollar Index moves sideways near daily lows.
• The data from Australia in the Asian session will be watched next.

The AUD/USD pair rose above the 0.74 mark in the early NA session and went into a consolidation phase in that area as markets stay quiet ahead of important central bank events. As of writing, the pair is up 0.15% on the day at 0.7410.

Today’s data from the United States showed that pending home sales rebounded with a 0.9% monthly growth in June following May’s 0.5% contraction. On a yearly basis, however, sales fell to -4% from -2.2%. On the other hand, Dallas Fed’s Manufacturing Business Index fell to 32.3 in July from 36.5 in June to come in below the market estimate of 31. Following the data releases, the US Dollar Index stayed in the lower half of its daily range in the 94.20/30 range.

In the early trading hours of the Asian session, new home sales and building permits data will be released from Australia. In May, home sales fell by 4.4% and are  expected to record a 4.5% increase in June. Furthermore, non-manufacturing & manufacturing PMI readings from China could impact the pair’s price action.

The next significant catalyst, however, is going to be the FOMC meeting on Wednesday. “Our economists expect any changes to be perfunctory and cosmetic, though they note that the Fed could acknowledge some recent softness in the housing data. As a complement to June’s removal of forward guidance language, the statement could also include some language, such as the phrase “for now” featured in Powell’s recent monetary policy testimony,” Deutsche Bank analysts said in a recently published report.

Technical outlook

Resistances for the pair align at 0.7450 (50-DMA), 0.7500 (psychological level) and 0.7575   (Jun. 14 high). On the downside, supports could be seen at 0.7370 (Jul. 26 low), 0.7310 (Jul. 2 low) and 0.7255 (May 13, 2016, low).