AUD/USD Weakened as US Treasury Yields Rise Ahead of RBA Meeting

The AUD/USD pair weakened to around 0.7010 in early Asian trade as the US dollar gained strength on higher US Treasury yields and rising expectations of further Federal Reserve tightening.

US Treasury yields rose, pushing the US 10-year yield toward 4.3%, which widened the yield gap against Australia's 10-year yield of around 4.15%. This yield divergence has historically put pressure on the Australian dollar, causing it to drop by over 3% within a three-week window.

The Reserve Bank of Australia (RBA) is expected to raise interest rates by 25 basis points to 4.60%, taking the Official Cash Rate to a level last seen in November 2011. The upcoming RBA meeting on Tuesday will be closely watched, with any signals of further hikes likely to impact the AUD/USD pair.

Technically, the AUD/USD is below its 100-day Simple Moving Average (SMA), and the Relative Strength Index (RSI) is at 33, indicating heavily oversold conditions. However, selling pressure is stretched, so it's recommended to avoid chasing the market lower without confirmation of a breakdown.