AUD/USD RISES ON RBA’S RELATIVELY HAWKISH STANCE

• AUD/USD rises as markets continue to expect the Fed to cut rates in June. 
• The RBA by contrast is striking a more hawkish tone, suggesting rates may even need to rise. 
• Iron Ore prices are a drag on AUD/USD as they tumble amidst China property slump. 

AUD/USD is trading in the lower 0.6600s on Wednesday during the US session. It is marginally up by two tenths of a percent on the day as markets continue to expect the Federal Reserve (Fed) to cut interest rates in June, despite stickier inflation data. Lower interest rates are negative for USD since they mean less foreign capital inflows. This contrasts with the Reserve Bank of Australia (RBA) which may still hike. 

From a technical perspective AUD/USD has stalled after rallying up and hitting key resistance from a long-term trendline. Overall the outlook remains bearish as the pair is in a long-term downtrend, producing lower highs and lower lows.