AUD/USD turns neutral, around 0.7420 post-US data

   •  US monthly retail sales bang in-line with market expectations.
   •  Empire state manufacturing index betters consensus estimates.

The AUD/USD pair surrendered early gains to an intraday high level of 0.7442 and turned neutral in reaction to the latest US macroeconomic releases.

With investors looking past dismal Chinese economic data, a follow-through US Dollar selling helped the pair to reverse an early dip to an intraday low level of 0.7409 and turn higher for the third consecutive session.

The positive bias, however, failed to gain any follow-through traction following the release of mostly in-line US monthly retail sales data, coming in to show a 0.5% m/m growth. Excluding automobiles, core retail sales also matched expectations and increased by 0.4% on a monthly basis. 

Adding to this, Empire State Manufacturing Index eased less than expected to 22.6 for July and did little to exert any additional downward pressure on the already weaker greenback.

It would now be interesting to see if the pair is able to catch any fresh bids at lower levels as market participants now turn their attention to the latest RBA monetary policy meeting minutes, due for release during the early Asian session on Tuesday.

Technical levels to watch

The 0.7410-0.7400 region might continue to act as an immediate support, below which the pair could head back towards testing the 0.7360 strong horizontal support. On the flip side, momentum beyond the 0.7440 area (session tops) now seems to lift the pair back towards 0.7480-85 supply zone en-route the key 0.7500 psychological mark.