AUD/USD struggles to extend rebound beyond 0.7350

• AUD/USD looks to end the day modestly higher.
• US Dollar Index continues to move sideways above 93.00.
• Focus shifts to Consumer Confidence data from Australia. 

The AUD/USD pair reached a daily high of 0.7357 during the American trading hours on Tuesday but struggled to preserve its bullish momentum. As of writing, the pair was up 0.2% on the day at 0.7347.

DXY remains on track to close above 93.00

Although AUD/USD remains on track to end the day in the positive territory, the unabated USD strength suggests that the pair could continue to have a tough time pushing higher in the near term. Supported by a more-than-1% increase in the benchmark 10-year US Treasury bond yield, the US Dollar Index (DXY) is up 0.12% on the day at 93.08.

Earlier in the day, the US Bureau of Labor Statistics announced that Unit Labor Costs in the US rose by 1% in the second quarter. This reading followed a 2.8% decline in the first quarter but failed to trigger a noticeable market reaction.

On Wednesday, the Westpac Consumer Confidence Index data for August will be featured in the Australian economic docket.

On the other hand, the Consumer Price Index (CPI) repor from the US will be watched closely in the American session. Investors expect the Core CPI to edge lower to 4.3% in July from 4.5% and a stronger than expected reading is likely to provide a boost to the USD and vice versa.

Technical levels to watch for