Ella 
AUD/USD faced fresh supply on Tuesday and was weighed down by a slightly stronger greenback.
AUD/USD was supported by bets on further rate hikes by the Federal Reserve for a second day in a row.
A positive risk tone could dampen risk aversion in the greenback and prevent the risk asset Aussie from falling.
During the Asian session on Tuesday, AUD/USD faced some selling pressure and fell to fresh intraday lows, and the latest fell further below the mid-0.6500 level, snapping a three-day winning streak.
The U.S. dollar (USD) traded higher for a second day amid growing expectations that the Federal Reserve (Fed) will stick to its hawkish stance. That bet was reaffirmed by the closely watched U.S. jobs report, which showed continued tightness in the labor market and raised the prospect of a soft landing for the economy. In addition, Fed officials said on Monday that further rate hikes are likely due to persistently high inflation. This remains supportive for higher U.S. bond yields, which in turn provides a “tailwind” for the dollar and puts some downward pressure on the AUD/USD pair.
Still, general strength in equities capped sharp gains in the safe-haven U.S. dollar and could provide some support for the risk-sensitive Australian dollar (AUD). On top of that, the RBA’s hawkish outlook suggests interest rates may still have to move higher, which could further limit AUD/USD’s losses, at least for now. Traders may also avoid aggressive directional bets ahead of this week’s latest consumer inflation data in China and the U.S. on Wednesday and Thursday, respectively.
Against the aforementioned mixed fundamental backdrop, it would be prudent to wait for strong follow-through selling in AUD/USD before confirming that the AUD/USD pair’s short-term rally from two-month lows around 0.6515 is over. AUD/USD would therefore need a sustained break below the 0.6500 psychological mark to support a resumption of the three-week-old decline. Traders now focus on U.S. inflation data, which, along with Fed speeches, will influence dollar price dynamics. In addition, the expansion of risk sentiment may further promote short-term opportunities in AUD/USD.
