AUD/USD loses ground ahead of RBA minutes

• The AUD/USD trades with losses below 0.6850 on Monday.
• Investors eye RBA minutes and PBoC monetary policy announcement for cues. 
• US Stocks and Bonds markets closed on Juneteenth celebrations.

The AUD/USD tallies a second consecutive day of losses below the 0.6850 area, and investors seem to have turned cautious ahead of the release of the Reserve Bank of Australia (RBA) minutes. In addition, all eyes will be on the People’s Bank of China (PBoC) monetary policy announcement in a quiet session as US traders celebrate Juneteenth. For the rest of the week, key data released by the US is set to start shaping the next Fed policy decision expectations

Investors await RBA minutes and economic data from the US

The Aussie price dynamics may have an impact following the release of RBA’s minutes on the early Tuesday Asian session, where investors will look for clues regarding the latest surprising decision by Governor Philip Lowe to hike rates by 25 basis points to 4.10%. That being said,  Lowe and Bullock’s hawkish comments last week may limit a potential surprise in the minutes.

Across the Pacific, the focus will be on the release of housing data, S&P PMI and jobless claims data this week. In that sense, Jerome Powell, Chair of the Federal Reserve, announced last Wednesday a halt in interest rate hikes to allow officials more time to gather crucial information and evaluate its impact on monetary policy. Macroeconomic data points are, therefore, expected to play a significant role in shaping expectations for the upcoming July meeting. Additionally, Chair Powell's testimony before Congress on Wednesday has the potential to trigger notable reactions in USD price dynamics.

AUD/USD Levels to watch

Technically speaking, the AUD/USD maintains a bullish outlook for the short term, as per indicators on the daily chart. Despite the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both displaying bullish exhaustion, they still remain in positive territory, suggesting that there may be more upside favouring the Aussie in the near term. In addition, the 20-day Simple Moving Average (SMA), is set to display a bullish cross with the longer-term 100-day SMA, which could potentially give an additional boost to the pair.

If AUD/USD manages to move higher, the next resistances to watch are at the 0.6850 area, followed by the psychological mark at 0.6900 and the 0.6920 area. On the other hand, the 0.6800 zone is the immediate support level for the pair. A break below this level could expose the 0.6750 area and then pave the way to the 100-day Simple Moving Average (SMA) at 0.6720.