Technical Analysis

AUD/USD sellers regain near-term control as Lowe’s speech spurs RBA rate cut bets

AUD/USD falls to session lows near 0.6880 after Lowe’s speech

ForexLive

Price has now fallen below the 100-hour MA (red line) and that has seen sellers establish a more bearish near-term bias in the pair once again. As the pair trades at session lows now, sellers will be aiming towards last week’s low of 0.6865 as the next key near-term target in the sessions to follow.

RBA governor Philip Lowe’s speech earlier didn’t exactly confirm that the central bank will be cutting rates in two weeks’ time but the language is suggestive and as mentioned here, the odds need not necessarily be overwhelming to keep the aussie pressured.

As long as there is the lingering thought that the RBA is likely to cut rates at their 4 June meeting, it’ll be extremely tough for the aussie to pull off any sustainable rallies in the build up towards the meeting.

As such, I would still expect the aussie to be pressured but a further drop below 0.6800 may be tough unless markets start viewing that a RBA rate cut is a done deal – which is difficult to really see given that Lowe’s language earlier isn’t exactly incontrovertible.

AUD/USD D1 21-05

Looking at the bigger picture, there is key support from the January 2016 lows around 0.6827-40 and I would expect that to be a place buyers will lean on and for sellers to take some money off before angling for a further move lower.

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