AUD/USD consolidates daily gains around 0.7470, eyes on US data

• AUD/USD is clinging to strong daily gains on Tuesday.
• Upbeat market mood is helping AUD find demand.
• US Dollar Index remains on the back foot ahead of mid-tier data.

After managing to close near 0.7400 on Monday, the AUD/USD pair regained its traction during the Asian trading hours on Tuesday and climbed to its highest level since early September at 0.7476 before going into a consolidation phase. As of writing, the pair was up 0.78% on a daily basis at 0.7468.

DXY turns south as risk flows return

The positive shift witnessed in market sentiment seems to be boosting AUD/USD on Tuesday. Reflecting the upbeat mood, US stock index futures are up between 0.4% and 0.5%, suggesting that Wall Street's main indexes remain on track to open in the positive territory. On the flip side, the greenback is struggling to find demand as a safe haven and the US Dollar Index (DXY) is losing 0.4% at 93.57.

Earlier in the day, the Reserve Bank of Australia's (RBA) meeting minutes didn't offer any fresh insights into the bank's policy outlook. The RBA reiterated that the economic activity is expected to return to pre-pandemic levels in the second half of 2022 and added that they don't expect to reach the inflation target until 2024.

Later in the session, September Housing Starts and Building Permits data from the US will be looked upon for fresh impetus. 

On Wednesday, the Westpac Leading Index for September will be featured in the Australian economic docket.

Technical levels to watch for