AUD/USD consolidates daily gains, looks to close below 0.7400

• AUD/USD remains on track to post modest gains on Monday.
• US Dollar Index stays in the negative territory in the American session.
• Focus shifts to FOMC policy meeting, high-tier US data.

After spending the first half of the day in a relatively narrow band around 0.7350, the AUD/USD pair gained traction during the American session and touched a daily high of 0.7390 before going into a consolidation phase. As of writing, the pair was up 0.22% on a daily basis at 0.7380.

DXY remains on the back foot at the start of the week

The renewed USD weakness on Monday allowed AUD/USD to push higher. In the absence of high-tier macroeconomic data releases, the modest decline witnessed in the benchmark 10-year US Treasury bond yield weighs on the greenback. Additionally, the S&P 500 Index notched a new record high after the opening bell and made it difficult for the US Dollar Index (DXY) to stage a rebound. At the moment, the DXY is losing 0.35% at 92.58.

The Australian economic docket won't be featuring any data on Tuesday and the USD's market valuation is likely to remain the primary driver of AUD/USD's movements. Later in the day, June Durable Goods Orders will be the first high-impact data of the week from the US.

On Wednesday, the Federal Reserve will announce its Interest Rate Decision and publish the Monetary Policy Statement. Later in the week, the US Bureau of Economic Analysis' first estimate of the second-quarter GDP growth will be looked upon for fresh impetus.

Technical levels to watch for