Australian Dollar edges higher on renewed RBA hike bets ahead of Bullock, jobs data

The Australian Dollar (AUD) edged higher on Monday, trading around 0.7130 at the time of writing, up 0.06% for the day. Investors were buoyed by renewed speculation that the Reserve Bank of Australia (RBA) may raise interest rates again at their upcoming monetary policy meeting. The RBA has already increased its Official Cash Rate (OCR) by 75 basis points (bps) this year to 4.35%, amid ongoing concerns about persistent inflation.

RBA Governor Michele Bullock echoed these tightening hopes during a recent appearance before the Parliamentary Treasury Committee, stating that inflation risks remain tilted upwards and questioning whether existing monetary tightening will be enough to bring inflation back to target within a reasonable timeframe. The focus now shifts to Bullock's Tuesday appearance in Sydney, where market participants will be searching for further insights into the RBA's next move.

Australian labor market data is due on Thursday, which could also bolster AUD strength if it signals strong employment growth. Conversely, the US Dollar (USD) is supported by expectations of continued interest rate hikes by the Federal Reserve (Fed), with Federal Reserve President Neel Kashkari recently warning that inflation remains too high in the US economy.

This could potentially limit AUD/USD gains. Geopolitical tensions between the US and China, as well as the US-China trade summit happening on Thursday, could also impact the AUD/USD pair. Technical analysis indicates that AUD/USD is currently neutral-to-slightly-bullish, hovering above the 100-period simple moving average (SMA) at 0.7120 but struggling to break above the 200-period SMA at 0.7147.

Immediate resistance is at 0.7140, with the 200-period SMA at 0.7147 and the next horizontal barrier near 0.7188 serving as further hurdles for the upside. On the downside, the 100-period SMA at 0.7120 offers support, with a broader demand zone defined by 0.7105 and 0.7075 levels.