AUD/USD bulls approach 0.7000 as RBA’s Lowe teases more rate hikes

AUD/USD renews intraday high to 0.6975 on RBA Governor Philip Lowe’s measured hawkish remarks. In doing so, the Aussie pair awaits RBA Meeting Minutes to confirm the bullish bias during early Tuesday’s Asian session.

Reserve Bank of Australia (RBA) Governor Philip Lowe said, per Reuters, “Australians should be prepared for more interest rate increases,” during his speech on Tuesday. The policymaker also defended the central bank’s 0.50% rate hike by saying that rates were still ‘very low’ and it was important that higher inflation did not feed into public expectations and wage claims.

Also read: RBA’s Lowe: Australians should be prepared for more interest rate increases

It’s worth noting that RBA’s Lowe also stated, “I want to emphasize though that we are not on a pre-set path.” The same probes the AUD/USD buyers ahead of the Minutes of the latest RBA Monetary Policy Meeting.

Also challenging the Aussie pair is the return of the full markets and anxiety ahead of Fed Chair Jerome Powell’s Testimony.

However, softer US Dollar Index (DXY) and the Treasury yields join upbeat stock futures to keep the AUD/USD buyers hopeful. That said, US Dollar Index (DXY) began the week on a negative note as the Juneteenth holiday allowed bulls to take a breather. It should be noted that the greenback’s gauge versus the six major currencies dropped 0.16% to 104.45 by the end of Monday, taking round to the same level at the latest.

Furthermore, the US 10-year Treasury yields begin the week at around 3.27%, mostly unchanged, while the S&P 500 Futures rise 1.10% to print the second consecutive daily gain.

Looking forward, the RBA Meeting Minutes will precede the Chicago Fed National Activity Index and the US Existing Home Sales for the said month to entertain intraday traders. However, major attention will be given to Federal Reserve (Fed) Chairman Jerome Powell’s Testimony on the bi-annual Monetary Policy Report, on Wednesday and Thursday.

Technical analysis

AUD/USD buyers seem running out of fuel below the 10-DMA hurdle near 0.7000. However, the weekly support line, around 0.6930 by the press time, restricts the quote’s immediate downside.