Bullish view

 Bearish view

The AUD/USD exchange rate rose for three days straight as the bond market pointed to a potential rate hike by the Reserve Bank of Australia (RBA). It jumped to a high of 0.6695 as the US dollar index (DXY) tumbled. Australia rate hike odds riseThe bond market is pointing to a potential divergence between the Reserve Bank of Australia and other global central banks. On the one hand, banks like the European Central Bank (ECB) and the Bank of Canad are expected to slash interest rates this week.The RBA, on the other hand, is expected to hike interest rates in its battle against the stubbornly high inflation. Data shows that the yield of the 10-year government bonds has jumped to 4.35% while the 30-year has moved to 4.78%.This performance happened even after the Fair Work Commission set minimum wages by 3.5% on Monday. That was lower than the expected 4%, a move that the agency blamed to poor labor productivity and the fear that higher wages will stir inflation.Data released last week revealed that Australia’s inflation remained stubbornly high in April. Another report released earlier Tuesday showed that Australia’s retail sales rose slightly after falling by 0.4% in the previous month.The AUD/USD pair rose as the US dollar index slumped following the release of the weak manufacturing PMI data. According to the ISM, the country’s manufacturing PMI slumped from 49.2 in April to 48.7 in May, missing the expected 49.8.The US will publish a few important numbers on Tuesday. The Bureau of Labor Statistics (BLS) will publish the latest JOLTs job openings report. This data will come a day before ADP publishes its estimate of private payrolls.The US will also release its official nonfarm payrolls data on Friday. With the country publishing weak economic numbers, analysts at Standard Chartered believes that the Fed could be forced to slash rates as soon as in July. AUD/USD technical analysisThe four-hour chart shows that the AUD/USD pair formed a double-bottom pattern at 0.6591. It has now moved slightly above the crucial resistance level at 0.6680, the pattern’s neckline. The pair has moved to the first support of the Andrew’s pitchfork tool.It has also moved above the 50-period Exponential Moving Average (EMA) and the 23.6% Fibonacci Retracement point. The Relative Strength Index (RSI) and the MACD have all pointed upwards. Therefore, the pair will likely continue rising as buyers target the year-to-date high of 0.6715.More By This Author:EUR/USD Forex Signal: Breaks Above Key Resistance LevelsMULN Stock Price Forecast: Is Mullen A Good Buy In May? AUD/USD Forex Signal: Extremely Bullish Above 0.6685