AUD/USD consolidates gains after climbing to fresh weekly high near 0.7600

• Reserve Bank of Australia left its policy rate unchanged at 0.1%.
• US Dollar Index clings to modest daily gains above 92.30.
• Focus shifts to ISM Services PMI data from the US.

After moving sideways in a very tight range on Monday, the AUD/USD pair gained traction during the Asian session on Tuesday and reached its highest level in a week at 0.7599 before going into a consolidation phase. As of writing, the pair was up 0.72% on a daily basis at 0.7583.

RBA policy announcements trigger AUD rally

Earlier in the day, the Reserve Bank of Australia (RBA) announced that it left its policy rate unchanged at a record low of 0.1% in July as largely expected. However, the RBA said that it will reduce the amount of weekly bond purchases to A$4 billion from A$5 billion. This development provided a boost to the AUD.

In its policy statement, the RBA reiterated that it remains committed to preserving highly supportive monetary conditions and noted that it will not raise the cash rate until actual inflation is sustainably within the 2-3% range. 

Speaking at the post-monetary policy meeting press conference, RBA Governor Phillip Lowe noted that they are unlikely to raise the cash rate before 2024. 

On the other hand, the US Dollar Index is posting modest daily gains above 92.30 ahead of the ISM Services PMI report and keeping AUD/USD's upside limited for the time being. 

ISM Services PMI Preview: Why the inflation component could trigger a dollar rebound.

Technical levels to watch for