AUD/USD consolidates daily losses below 0.7150 following sharp drop on RBA minutes

• RBA says the likelihood of a near-term rate hike is low.
• US Dollar Index stays close to 97 ahead of mid-tier data.
• Data from China likely to be the next significant catalyst for the AUD.

The AUD/USD pair came under strong bearish pressure during the Asian trading hours and lost more than 30 pips from Monday's closing level after the Reserve Bank of Australia in its meeting minutes said that the likelihood of a near-term rate hike was low. With trading action turning subdued ahead of the NA session, the pair is moving sideways near its daily lows, erasing 0.46%on a daily basis at 0.7142.

Commenting on the RBA's publication, "Following the discussion of the easing scenario no probability judgment was offered. This is in contrast to judgment in the March minutes that “the probabilities around these scenarios were more evenly balanced than they had been over the preceding year.” We might be reading too much into this but we think the small change does matter,” ANZ analysts said.

In the early Asian trading hours on Wednesday, retail sales, industrial production, and GDP data from China will be looked upon for fresh impetus. If the data confirms that the economic slowdown in China is starting to fade away as hinted by the upbeat PMI figures from earlier this month, we could see the AUD gather strength and vice versa.

On the other hand, ahead of the Fed's industrial production and capacity utilization data, the US Dollar Index is clinging to small gains a little below the 97 mark, not allowing the pair to stage a correction.

Technical levels to consider