Australian Dollar cracks 0.70 as Bullock dulls RBA hike, CPI looms

On Tuesday, the Australian Dollar plummeted more than 0.40% against the US Dollar, falling below the 0.7000 mark following the Reserve Bank of Australia (RBA) raising interest rates to 4.60%. However, RBA Governor Bullock's cautious approach paved the way for the currency to dip further. Wall Street experienced losses, and US Treasury yields remained elevated, with 5- and 10-year T-note yields surpassing the 5% threshold.

Fed Chair John Williams suggested the Federal Reserve is not in a hurry to raise interest rates. While some Fed officials remained hawkish, Governor Michael Barr indicated that policy adjustments are necessary, predicting further rate hikes. St. Louis Fed's Alberto Musalem acknowledged that policy remains accommodative despite the September hike, while Chicago Fed's Goolsbee warned that persistent inflation poses risks.

US economic data included a sharp decline in the Conference Board Consumer Sentiment to its lowest level since early 2014, at 81.9, below expectations of 89.0. Job openings also fell to 7.079 million in August, below forecasts, signaling a balanced labor market. In Australia, the RBA increased interest rates and kept the door open for additional hikes.

Upcoming inflation data, with the Trimmed Mean CPI for August expected to remain unchanged at 3.6% year-over-year, will be crucial for AUD/USD. The technical analysis suggests a bearish near-term bias, as AUD/USD trades below clustered moving averages and the RSI approaches oversold territory. Resistance lies at the triple-SMA area around 0.7093, while support is provided by a series of upward-sloping trend-line supports ranging from the mid-0.68s to upper-0.66s.