• AUD/USD dipped on Tuesday as investors digested minutes of the RBA's May meeting.
• RBA minutes showed policymakers debated holding rates steady or hiking 25 bps to 4.35% at the May meeting.
• Eight of the nine RBA board members saw a stronger case for a rate hike, citing rising inflation risks from the prolonged Middle East conflict and concerns that a 4.1% cash rate may not be restrictive enough.
• Members agreed to closely watch incoming data and evolving risks, while noting monetary policy could not change the near-term inflation path and economic growth was likely to remain below potential for some time.
• Markets are pricing in around a 75% chance of another rate hike in August, with interest rates expected to peak near 4.60% and some risk of rising as high as 4.85%.
• Immediate resistance is located at 0.7175 (38.2%fib), any close above will push the pair towards 0.7193(23.6%fib).
• Support is seen at 0.7090(38.2%fib) and break below could take the pair towards 0.7065(Lower BB).
Recommendation: Good to sell around 0.7160 with stop loss of 0.7220 and target price of 0.7090
