• AUD/USD reverses an intraday dip on Monday, though lacks any follow-through buying.
• Bets for another 25 bps Fed rate hike in June underpin the USD and cap gains for the pair.
• Traders look to the US ISM Services PMI for some impetus ahead of the RBA on Tuesday.

The AUD/USD pair attracts some dip-buying near the 0.6580 area and climbs to the top end of its intraday trading range during the early North American session on Monday. The pair currently trades just above the 0.6600 mark and remains well within the striking distance of a nearly two-week high touched on Friday.

A private-sector survey showed on Monday that China's services activity picked up in May and raises hopes of a recovery in the world's second-largest economy. Adding to this, speculations that the Reserve Bank of Australia (RBA) could tighten its policy further lend some support to the China-proxy Aussie. The upside for the AUD/USD pair, however, seems limited, at least for the time being, as traders seem reluctant to place aggressive bets ahead of the RBA meeting on Tuesday. Apart from this, a strong follow-through US Dollar (USD) buying further contributes to capping the major.

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, builds on Friday's post-NFP goodish rebound from over a one-week low and continues gaining traction for the second successive day amid expectations for additional rate hikes by the Federal Reserve. In fact, the current market pricing indicates a 30% chance of another 25 bps lift-off at the end of a two-day FOMC monetary policy meeting on June 14. This remains supportive of a further rise in the US Treasury bond yields, which underpins the buck and holds back the AUD/USD bulls from placing fresh bets.

Heading into the key central bank event risk, the aforementioned mixed fundamental backdrop warrants some caution before positioning for an extension of the AUD/USD pair's recent recovery from the multi-month low touched last week. In the meantime, traders on Monday will take cues from the release of the US ISM Services PMI. This, along with the US bond yields, will influence the USD price dynamics and produce short-term trading opportunities around the major.