AUD/USD Reverses Gains as Stronger US Dollar Cuts Upside

The AUD/USD pair has reversed its gains on Monday as a stronger US Dollar and hawkish Federal Reserve expectations have capped the upside. However, the possibility of another rate hike by the Reserve Bank of Australia (RBA) is providing underlying support to the Australian Dollar.

At the current price of 0.7123, the pair has touched an intraday high of 0.7140 but remains above its key daily Simple Moving Averages (SMA). The Relative Strength Index (RSI) is hovering near a neutral 48, while the Moving Average Convergence Divergence (MACD) has slipped into negative territory.

Despite the mixed momentum, analysts expect another rate hike by the RBA this month. If this happens, it would widen the policy gap between Australia and the US, giving the Australian Dollar a relative yield advantage.