AUD/USD sticks to daily gains above 0.72 ahead of RBA

• The AUD/USD pair recovers despite the uninspiring data from Australia.
• The RBA is expected to keep the policy rate unchanged at 1.5%.
• The US Dollar Index looks to end the day slightly higher.

The AUD/USD pair touched its lowest level in more than 20 months at 0.7164 on disappointing macroeconomic data releases from Australia. However, the pair recovered its losses and turned positive on the day above the 0.72 mark as investors started to take their profits off the table ahead of the RBA meeting. As of writing, the pair was trading at 0.7215, adding 0.3% on the day.

Earlier today, the Australian Bureau of Statistics reported that retail sales stayed unchanged on a monthly in July following June's 0.4% growth and missed the analysts' estimate of 0.3%. Furthermore, the ANZ job advertisements declined by 0.6% in August compared to July's 1.4% increase. 

In the meantime, with NA traders enjoying the Labor Day holiday, the greenback's price action stayed subdued throughout the day with the US Dollar Index moving sideways in a tight range above the 95 handle.

During the early trading hours of the Asian session, the current account balance for the second quarter will be released from Australia before the Reserve Bank of Australia publishes its monetary policy statement and announces the interest rate decision. "On the RBA, no change in policy is expected at the Board Meeting on Tuesday- market pricing has the chance of a hike at 0.0% - with only 1 basis point priced in by the end of 2018," ANZ analysts note. "Nevertheless, RBA watchers will dissect the post-meeting Media Release and Governor Lowe's remarks on Wednesday night for any clues for the policy outlook.”

Technical levels to consider

The next resistance for the pair aligns at 0.7280 (20-DMA) ahead of 0.7355 (50-DMA) and 0.7440 (Aug. 7 high). On the downside, supports could be seen at 0.7165/60 (daily low/Dec. 23, 2016, low), 0.7110 (Mar. 1, 2016, low) and 0.7000 (psychological level).