AUD/USD trades flat on the day near 0.7100 ahead of key events

• US Dollar Index stays in red below 96.50.
• RBA says policymakers agreed on no strong case for near-term move in rates.
• Focus stays on FOMC meeting and employment data from Australia.

The AUD/USD pair is trading in a relatively tight range on Tuesday and is struggling to determine its next short-term direction ahead of this week’s important events. As of writing, the pair was virtually unchanged on the day at 0.7100.

Earlier today, the RBA’s minutes of its March meeting didn’t offer anything and failed to trigger a market reaction. The RBA in its publication reiterated that the board agreed that there wasn’t a strong case for a move in policy rate in the near term and there were significant uncertainties on the economic outlook. Meanwhile, the house price index in the fourth quarter declined by 5.1% in Australia on a yearly basis to miss the market expectation of -0.4%.

Nevertheless, the pair struggled to push higher as the bearish pressure surrounding the greenback remained intact with investors pricing a dovish dot plot on Wednesday. At the moment, the US Dollar Index is down 0.15% on the day at 96.38.

“Recent Fedspeak suggests that the Fed is likely to pare back its economic projections and the path of the hiking cycle at the upcoming meeting,” Barclays analysts said. “We believe the risks are skewed toward a dovish surprise.”

Later in the week, the labour market data from Australia will be the next significant catalyst on the AUD’s market valuation.

Key technical levels