AUD/USD looks vulnerable below 0.6700 as Fed prepares for more rate hikes

• AUD/USD is expected to extend its downside journey amid hawkish Fed bets.
• The USD Index is trying to defend its immediate support of 101.63 ahead of US Durable Goods Orders.
• A consensus of further decline in Australian inflation will allow the RBA to keep rates steady.

The AUD/USD pair has shifted its suction below the round level support of 0.6700 in the Asian session. After defending the immediate support of 0.6680, an absence of recovery in the Aussie asset is making it vulnerable. The downside bias for the Aussie asset is also solid due to rising bets for one more consecutive 25 basis points (bps) rate hike from the Federal Reserve (Fed).

S&P500 futures are holding losses generated in the early Asian session, showing caution as more United States companies are going to report their quarterly earnings ahead. The US Dollar Index (DXY) is attempting to defend the four-day support of 101.63. The USD Index has been displaying topsy-turvy moves for the past four trading sessions in a 101.63-102.23 range amid an absence of a potential trigger.

A power-pack action is expected from the USD Index this week amid the release of the Durable Goods Orders data, which provides a glimpse of forward demand. For March, Durable Goods Orders data is seen expanding by 0.8% vs. a contraction of 1.0%. An upbeat economic data would be supportive of more rate hikes from the Federal Reserve (Fed).

This week, the Australian Dollar will remain in action amid the release of the Inflation data. As per the expectations, inflation data for the first quarter of CY2023 has decelerated to 1.3% from the prior release of 1.9%. Annual inflation has softened to 6.9% vs. the prior release of 7.8%. The monthly Consumer Price Index (CPI) indicator (March) is expected to show further softening to 6.5% against the former release of 6.8%. An occurrence of the same would allow the Reserve Bank of Australia (RBA) to keep the interest rate policy steady ahead.