- The AUD/USD pair slumped after the RBA’s Lowe showed readiness for a further easy policy if demand disappoints.
- The likeliness of the Fed’s excessive easing recently drags the US Dollar (USD) down.
- Positive developments surrounding the US-China trade deal favors the Aussie.
Having witnessed a go for further rate cut by the RBA Governor, the AUD/USD pair slumped 20+ pips to 0.6965 during early Thursday.
The Reserve Bank of Australia’s (RBA) Governor Philip Lowe spoke on the subject of “Inflation Targeting and Economic Welfare” at the Anika Foundation Lunch in Sydney.
Read: Breaking: RBA’s Lowe: Prepared to ease policy further if demand disappoints, Aussie refreshes 2-week lows
The shift in market sentiment triggered through early-day geopolitical catalysts concerning North Korea and Saudi Arabia failed to stall the Aussie pullback amid rising speculations of the Fed’s 50 bps rate cut during next week.
It should also be noted that recent positive developments about the US and China favor the Australian Dollar (AUD) as the dragon nation is Australia’s largest customer.
Traders may now keep an eye over the US economic calendar, June month release of Durable Goods Orders, for fresh direction. However, the importance of trade/political headlines to trigger intermediate moves can’t be denied.
Technical Analysis
Sustained break of 21-day exponential moving average (EMA) level, near 0.7000, becomes necessary for the pair to aim for 0.7040 and 0.7085 resistances, which if not achieved can keep highlighting a five-week-old ascending trend-line at 0.6963 and monthly low close to 0.6910.
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