AUD/USD clings to modest daily gains around 0.7530

• AUD/USD stays relatively calm following Friday's strong rebound.
• Retail Sales in Australia rose more than expected in May.
• US Dollar Index stays in the negative territory above 92.00.

The AUD/USD pair rose sharply on Friday as the greenback came under strong bearish pressure following the June jobs report. After gaining more than 50 pips, the pair continued to edge higher on Monday and was last seen trading at 0.7533, where it was up 0.1% on a daily basis.

Focus shifts to RBA meeting

Earlier in the day, the data from Australia showed that the Commonwealth Bank Services PMI improved modestly to 56.8 in June. Moreover, Retail Sales rose by 0.4% on a monthly basis in May, surpassing the market expectation for an increase of 0.1%. These upbeat figures seem to have provided a boost to the AUD during the Asian trading hours.

On the other hand, the USD stays on the back foot at the start of the week, helping AUD/USD remain afloat in the positive territory. Currently, the US Dollar Index is down 0.1% on the day at 92.15.

There won't be any high-tier macroeconomic data releases from the US in the remainder of the day and AUD/USD is expected to fluctuate in a narrow consolidation channel.

On Tuesday, the Reserve Bank of Australia (RBA) will announce its INterest Rate Decision and release the Rate Statement. 

Previewing the RBA meeting, "we now expect the RBA will moderately taper its QE program by announcing a further AUD75bn program once the current AUD100bn tranche of buying ends in September," said Lee Sue Ann, Economist at UOB Group.

RBA: Probable tapering on the table? – UOB.

Technical levels to watch for