AUD/USD displays exhaustion in upside momentum near 0.6900 as focus shifts to RBA minutes

• AUD/USD has shown exhaustion in the north-side momentum after reaching to near 0.6900.
• The risk-taking ability of the market participants is cooling down as the Fed has confirmed two more interest rate hikes this year.
• The minutes from RBA will provide a detailed explanation behind the interest rate hike of 25 bps.

The AUD/USD pair has witnessed an exhaustion in the upside momentum after coming closer to near the round-level resistance of 0.6900 in the European session. The Aussie asset is expected to remain on the tenterhooks as the US Dollar Index (DXY) has shown a solid recovery after printing a fresh monthly low at 102.05.

S&P500 futures are holding some losses in the London session as investors are worried that recession fears in the United States have not receded yet despite a skip in the policy-tightening spell by the Federal Reserve (Fed). The risk-taking ability of the market participants is cooling down as Fed chair Jerome Powell has confirmed two more interest rate hikes this year.

The USD Index has extended its recovery to near 102.30 as the risk-on market mood is fading now. Investors should understand that the rate-hiking spell has skipped for a month is not concluded as inflationary pressures are twice the desired rate of 2%.

On the Australian Dollar front, investors are awaiting the release of the Reserve Bank of Australia (RBA) minutes, which will release on Tuesday. The minutes from RBA will provide a detailed explanation behind the interest rate hike of 25 basis points (bps). RBA Governor Philip Lowe raised interest rates to 4.10% as monthly inflation has rebounded to near 6.8% after softening to 6.3%.

Also, the RBA minutes will provide guidance about the interest rate policy for July. The guidance for interest rates should be hawkish as Australian Employment has turned out to be resilient.