AUD/USD: Upside remains capped by 0.7300 post-RBA’s Lowe

• Stages solid comeback on broad USD selling, RBA Governor Lowe’s comments.
• But 0.7300 appears a tough nut to crack amid China slowdown fears, IMF warnings on Australia.

The bounce in the AUD/USD pair gained traction and tested the 0.73 handle again after the Reserve Bank of Australia (RBA) Governor Lowe sounded more upbeat on a rate hike. However, the bears continued to guard the last, leaving the rates largely unchanged near 0.7290 region.

RBA’s Lowe: Rates will likely rise at some point if economy advances as expected

 The solid comeback staged by the Aussie can be mainly attributed to broad-based US dollar selling, despite the sell-off in the European equities. The USD index drops to fresh daily lows of 96.04, extending the rout into a ninth straight day.

The spot continues to face strong offers at the 0.7300 levels and turns back lower, as the renewed China economic slowdown fears combined with the latest IMF warning on the Australian economy continue to weigh negatively on the Aussie.

IMF: Risks to Australia’s economy are “titled to the downside”, RBA should keep rates low

Further, the upside also remains capped amid expectations that the US housing indicators could see a turnaround later on Tuesday, which could offer some reprieve to the USD bulls.

AUD/USD Technical Levels