Turns sideways near fresh two-week high around 0.6550

• AUD/USD trades back and forth near weekly high ahead of the Fed and the RBA minutes.
• The reopening of Chinese markets has provided some strength to the Australian Dollar.
• Stubborn US price pressures fail to provide support to the US Dollar.

The AUD/USD pair consolidates in a narrow range after a sharp rally to near 0.6550 in Monday’s late European session. The Aussie asset is expected to remain on edge ahead of the release of the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed) minutes on Tuesday and Wednesday, respectively.

The reopening of Chinese markets after the Lunar New Year celebrations has improved the appeal of the Australian Dollar. Investors will focus on the interest rate decision by the People’s Bank of China (PBoC), which will be announced on Tuesday. The PBoC is expected to maintain a dovish stance as the Chinese economy faces deflation amid weak household spending and lower employment opportunities.

Being a proxy to the Chinese economy, the Australian Dollar strengthens on stimulus support from the PBoC.

Meanwhile, the US Dollar Index (DXY) remains under pressure despite robust United States consumer price inflation and Producer Price Index (PPI) data for January have dampened hopes of rate cuts by the Federal Reserve (Fed).

AUD/USD delivers a solid rally to near weekly high around 0.6540 on an hourly scale. The near-term outlook of the Aussie asset has turned bullish as it has stabilized above the 200-period Exponential Moving Average (EMA), which trades around 0.6517.

The 14-period Relative Strength Index (RSI) trades in the bullish range of 40.00-80.00, indicating more upside ahead.

More upside will appear if the asset breaks above the intraday high of 0.6552, driving the asset towards the round-level resistance of 0.6600, followed by the January 30 high at 0.6625.

In an alternate scenario, a downside move below February 15 low at 0.6477 would activate sellers and expose the asset to February 13 low at 0.6443 and the round-level support of 0.6400.

AUD/USD hourly chart