AUD/USD calm around 0.7130 ahead of RBA meeting minutes

• Trade optimism helps AUD gather strength on Monday.
• The US Dollar Index looks to close third straight day in the red.
• The RBA is scheduled to publish February meeting minutes.

The AUD/USD pair advanced to its highest level in two weeks at 0.7160 on Monday boosted by broad-based USD weakness and renewed trade optimism. However, the pair lost its traction in the second half of the day as investors booked their profits before the Reserve Bank of Australia publishes the minutes of its February meeting in the early Asian session. At the moment, the pair is down 0.1% on the day at 0.7130.

Previewing the publication, "After all was revealed in the subsequent switch-to neutral Governor speech the next day, and the February 8 Statement on Monetary Policy slashed growth forecasts and delayed yet again the return to target for core inflation. However, the actual policy statement released on Tuesday was rather upbeat (and misleading for the markets) suggesting that all was on track, just a small delay compared with expectations late last year,” TD Securities analysts wrote in a recently published report. 

Over the weekend, President Trump noted that "big progress" was being made on many different fronts in trade talks with China, raising hopes of the U.S. and China moving closer to a final trade agreement after this week's talks in Washington.

Meanwhile, the greenback felt the weight of the dovish Fed commentary from Friday and the US Dollar Index extended its losses to help the pair find support. At the moment, the DXY is down 0.15% on the day at 96.78.

Technical outlook by FXStreet Chief Analyst Valeria Bednarik

The 4 hours chart shows that the pair struggled around its 100 DMA for most of the day before finally giving up, now closer to a mild bullish 20 SMA. Technical indicators in the mentioned time frame have eased from their daily highs, the RSI heading nowhere around 53 and the Momentum easing within positive levels, skewing the risk to the downside without confirming it. For the pair to turn bearish, the 0.7070 level should give up.

Support levels: 0.7100 0.7070 0.7030

Resistance levels: 0.7145 0.7190 0.7225