AUD/USD is trading down 1.12% at 0.6782

The U.S. dollar edged lower in early European trade Tuesday, while the Australian dollar dipped despite the country’s Reserve Bank announcing a half-point rate hike.

At 3 AM ET (0700 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, edged 0.1% lower to 104.892, after climbing as high as 105.64 on Friday, close to the two-decade peak of 105.79 reached in mid-June.

Risk sentiment has been on the rise Tuesday, with stock markets generally higher, and this has weighed on the safe-haven dollar. That said, losses are limited given a strong rebound in the 10-year Treasury yield, which last traded at 2.937% from the lowest since May at 2.791% on Friday.

There was no trading in Treasury’s on Monday, with U.S. markets closed for the Fourth of July holiday, which also limited activity in the foreign exchange markets.

Elsewhere, AUD/USD fell 0.1% to 0.6858 after the Reserve Bank of Australia hiked its key interest rate by 50 basis points. While this move was widely expected, the U.S. Federal Reserve’s 75 basis point increase last month had fuelled speculation that Australia’s central bank might be more aggressive in its tightening.

“Despite this, the Aussie dollar has been largely de-linked from monetary policy and short-term rate dynamics, while remaining primarily driven by USD moves and the global risk environment,” said analysts at ING, in a note.

On technical fronts AUD/USD RSI stood at 34.37 and currently it is trading below all MA. So, SELL position can be taken with following target and stoploss:

TRADE SIGNAL – : AUD/USD – SELL: 0.6780, TARGET: 0.6760, STOP LOSS : 0.6812