AUD/USD Price Analysis: Drops sharply to near 0.6840 ahead of RBA minutes and PBoC’s policy

The AUD/USD pair has retreated after facing barricades around 0.6880 in the European session. The Aussie asset has dropped to near 0.6840 as investors are getting precautionary ahead of the release of the Reserve Bank of Australia (RBA) minutes and the monetary policy announcement by the People’s Bank of China (PBoC).

The US Dollar Index (DXY) is demonstrating a lackluster performance as United States markets are closed on Monday on account of Juneteenth.

Meanwhile, US Treasury yields have extended further as the Federal Reserve (Fed) has confirmed expansion in interest rates by 50 basis points (bps) to 5.50-5.75%. The 10-year US Treasury yields have jumped to 3.82%.

AUD/USD is climbing higher in a Rising Channel chart pattern formed on an hourly scale in which each pullback is considered as a buying opportunity. The Aussie has tested territory below the aforementioned pattern but is finding cushion near the horizontal support plotted from June 14 high at 0.6834.

Upward-sloping 100-period Exponential Moving Average (EMA) at 0.6826 indicates that the trend is bullish.

The Relative Strength Index (RSI) (14) is taking support near 40.00. A recovery move above 60.00 would strengthen the upside momentum.

A decisive break above the round-level resistance of 0.6900 will drive the asset toward Feb 16 high at 0.6936 followed by Feb 07 high at 0.6988.

On the flip side, a breakdown below June 14 low at 0.6756 will expose the Aussie asset to May 02 high at 0.6717 and May 19 high at 0.6675.

AUD/USD hourly chart