AUD/USD looks to close day flat near mid-0.75s

• AUD/USD reverses course before reaching the 0.76 mark, continues to trade between 50-DMA & 20-DMA
• DXY consolidates daily gains, looks to close the day in the positive territory.
• Thin trading volume doesn't allow any sharp fluctuations in the NA session.

The AUD/USD pair took advantage of the DXY's bearish gap and started the week on a positive note. After advancing to a daily high at 0.7580 during the early European trading hours, however, the pair lost its momentum and erased its daily gains to turn flat near mid-0.75s, where it's now staying lifeless and is headed for a flat close.

The pair's price action on Monday is dominated by the changes in the demand for the greenback. With European currencies suffering losses on political jitters in Italy, investors continue to flee to the USD, which remains a better investment alternative as the hawkish stance of the Fed ramps up the expectations for the bullish rally to continue. At the beginning of the NA session, the US Dollar Index touched its highest level of the year at 94.45 before going into a consolidation phase. As of writing, the index is up 0.17% at 94.37.

The market's reaction to the political developments in the euro area is likely to drive the USD's movements on Tuesday amid a lack of significant data releases. S&P/Case-Shiller Home Price index and Dallas Fed Manufacturing Business index will be featured on tomorrow's macroeconomic calendar. In the past couple of weeks, the manufacturing sector in the U.S. showed a health activity with PMI figures suggesting a faster-than-expected activity growth in the sector. Thus, a positive reading in Dallas Fed Manufacturing index, which is expected to improve to 23.3 in May from 21.8 in April, could help the greenback extend its gains.

Technical levels to consider

For the past 8 trading days, the pair has been fluctuating between the dynamic 20-DMA & 50-DMA levels. A break out of this range could help the pair determine its next short-term direction. On the upside, the pair could encounter the first resistance at 0.7600/0.7605 (psychological level/50-DMA) before stretching higher to 0.7680 (Apr. 23 high) and 0.7730 (200-DMA). On the other side, supports could be seen at 0.7525 (20-DMA), 0.7450 (May 15 low) and 0.7410 (May 9 low).