• AUD/USD struggles to gain any meaningful traction and remains confined in a range.
• A combination of factors revives the USD demand and acts as a headwind for the pair.
• Bets for additional RBA rate hikes lend support ahead of the key US PCE Price Index.

The AUD/USD pair is seen oscillating in a narrow trading band on Friday and consolidating its recent strong gains to the highest level since June 2022 touched the previous day. The pair is currently placed around the 0.7100 mark, nearly unchanged for the day, as traders look to the key US macro data for a fresh impetus.

The Fed's preferred inflation gauge - the Core PCE Price Index - is due for release in a short while from now. This might influence the US central bank's rate hike path, which, in turn, will drive the US Dollar demand and provide a fresh directional impetus to the AUD/USD pair. In the meantime, a goodish pickup in the US Treasury bond yields lends some support to the buck. Apart from this, the prevalent cautious market mood further benefits the greenback's relative safe-haven status and caps the upside for the risk-sensitive Aussie.

The modest intraday USD, however, lacks bullish conviction amid the prospects for a less aggressive policy tightening by the Fed. In fact, the markets are still pricing in a smaller 25 bps Fed rate hike move in February, which, in turn, keeps a lid on any meaningful upside for the greenback. Apart from this, rising odds for an additional rate hike by the Reserve Bank of Australia (RBA) in February, bolstered by the stronger domestic CPI report on Wednesday, underpin the domestic currency and acts as a tailwind for the AUD/USD pair.

Friday's US economic docket also features the release of Pending Home Sales data and the revised Michigan Consumer Sentiment Index. This, along with the US bond yields and the broader market risk sentiment, might influence the USD price dynamics and provide some impetus to the AUD/USD pair. The focus, however, will remain glued to the outcome of a two-day FOMC monetary policy meeting, scheduled to be announced next Wednesday. Heading into the key event risk, the major is more likely to prolong its consolidative price move.