“¢ The post-RBA uptick turned out to be short-lived.
“¢ Resurgent USD demand prompts some fresh selling.
“¢ Weaker copper prices exert some additional pressure.
The AUD/USD pair extended its post-RBA downfall and dropped to two-week lows, below the 0.7200 handle in the last hour.
The pair initially climbed to an intraday high level of 0.7238 in reaction to the RBA’s decision to leave official interest rates on hold for the 26th month in a row at a record low rate of 1.5%, as was widely anticipated.
In the accompanying rate statement, the central bank retained a neutral bias on the monetary policy outlook, indicating that interest rates are likely to remain at record-low levels for the foreseeable future.
Meanwhile, comments by the RBA Governor Philip Lowe, saying that the low level of interest rates is continuing to support the Australian economy, prompted some selling around the domestic currency.
Adding to this, a goodish pickup in the US Dollar demand, coupled with a mildly weaker tone around copper prices exerted some additional downward pressure on the commodity-linked Australian Dollar.
In absence of any major market moving economic releases from the US, the pair remains at the mercy of broader market sentiment surrounding the greenback ahead of the Fed Chair Jerome Powell’s scheduled speech later during the US trading session.
Technical levels to watch
A follow-through selling is likely to drag the pair further towards 0.7175-70 area en-route the 0.7140 horizontal support, below which the downfall could further get extended towards the 0.7100 round figure mark.
On the flip side, any meaningful up-move might continue to confront fresh supply near the 0.7235-40 area, which if cleared might trigger a short-covering bounce towards 50-day SMA hurdle near the 0.7280 region.
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