AUD/USD bulls pierce 0.6300 as RBA Minutes, Bullock sound hawkish

• AUD/USD takes the bids to refresh intraday high after RBA’s Bullock, Minutes favored buyers.
• RBA Minutes cited domestic/global uncertainty to justify 0.25% rate hike, Deputy Governor Bullock defends central bank hawks.
• Firmer sentiment battles with hawkish Fed bets, fears emanating from China to challenge buyers.
• Risk catalysts will be more important for fresh directions amid a lack of major data/events.

AUD/USD extends the week-start uptrend to refresh intraday high near 0.6315 as upbeat comments from the RBA policymakers and minutes favored the bulls during early Tuesday. Also keeping the pair buyers hopeful is the firmer sentiment.

As per the latest Monetary Policy Meeting of the Reserve Bank of Australia (RBA), the “Board weighed a range of arguments for hiking by 50 basis points, as it had for four months straight, but decided to lift the cash rate by 25 basis points to 2.6%.”

Earlier in the day, RBA Deputy Governor Guy Bullock mentioned that the board expects to increase interest rates further over the coming months. The policymaker also added that the pace and timing will be determined by data. It should, however, be noted that the comments stating, “RBA can achieve a similar rise in rates to its global peers through smaller hikes,” seemed to have probed the AUD/USD bulls while suggesting softer rate increases moving forward.

Also read: RBA minutes: Likely to require further increases in interest rates over the period ahead

Elsewhere, hawkish Fed bets and fears of market intervention in Japan and China seem to challenge the AUD/USD bulls, especially when the UK-led risk-on mood fades. That said, CME’s FedWatch Tool prints a nearly 95% chance of a 75 bps Fed rate hike in November. In doing so, the tool might have taken clues from upbeat comments from US Treasury Secretary Janet Yellen, suggesting a strong US jobs market, as well as upbeat US inflation expectations as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data.

It should be noted that China’s zero-covid policy, delaying of the key data/events and determination to defend the might of taking control in Hong Kong and Taiwan also challenge the AUD/USD buyers, due to the pair’s risk barometer status and ties with Beijing.

While portraying the market mood, S&P 500 Futures track Wall Street’s gains but the US 10-year Treasury yields retreat to 3.99%, which in turn probes the US Dollar Index (DXY) bears of late.

Looking forward, the second-tier housing data from the US will decorate the calendar but major attention will be given to the risk catalysts for clear directions. That said, bears are likely to retake control if the hawkish Fed bets propel the yields, DXY.

Technical analysis

Unless crossing a six-week-old bearish channel, currently between 0.6365 and 0.6100, the AUD/USD pair’s recovery remains elusive.