AUD/USD reverses RBA minutes-led downtick, turns higher for the day

   •  Dovish sounding RBA meeting minutes prompt some weakness on Tuesday.
   •  The prevalent USD selling bias/positive copper prices help regain traction.

The AUD/USD pair reversed an Asian session dip to the 0.7400 handle and turned higher for the day, albeit seemed struggling to move past overnight swing high.

The pair extended its retracement slide from previous session's multi-day high level of 0.7442 and remained on the back-foot following the release of RBA monetary policy meeting minutes. The Australian central bank said that downside risks have increased amid rising trade war risks and reiterated the need for interest rates to remain on hold.

Meanwhile, the downtick turned out to be short-lived and was being supported by the prevalent selling bias surrounding the US Dollar. This coupled with positive copper prices provided an additional boost to the commodity-linked Australian Dollar and further collaborated to the pair's intraday rebound of over 30-pips.

The up-move, however, lacked any strong follow-through momentum and the pair remained capped below mid-0.7400s as investors now look forward to the Fed Chair Jerome Powell's testimony before the Senate Banking Committee for some fresh impetus.

Ahead of the key event, the US economic docket, featuring the release of June industrial production and capacity utilization data, will also be looked upon to grab some short-term trading opportunities. 

Technical levels to watch

On a sustained move beyond the 0.7440-50 hurdle, the pair is likely to aim towards challenging the 0.7480-85 region before eventually rising to the key 0.7500 psychological mark. On the flip side, the 0.7400 handle now seems to have emerged as an immediate support, which if broken might turn the pair vulnerable to slide back towards testing 0.7365-60 area.