- AUD/USD dropped to levels last seen in October 2002 and rebounds.
- The pair rebounded after Governor Lowe’s speech.
- The RBA expects rates to remain at current levels for some years.
After dropping to the 0.5500 neighbourhood earlier in the session, AUD/USD has managed to regain some poise and is now trading in levels beyond 0.5700 the figure.
AUD/USD shows signs of life post-Lowe
The massive sell-off in AUD/USD seems to have found some decent support in the 0.5500 neighbourhood in the second half of the week, area last seen in October 2002, particularly following the speech by RBA’s Governor P.Lowe.
In fact, at his speech, Lowe stressed that interest rates are expected to remain at current levels for some years, while he expects “significant job losses” and opened the door to intervening in the FX market. Regarding the domestic currency, Lowe said the Aussie dollar has been a great shock absorber for the economy.
On another front, although adding to the steep decline, industrial metals sold off in Chinese markets. In this regard, copper futures dropped below the key $2.00 barrier, area last visited in January 2016.
AUD/USD levels to watch
At the moment the pair is gaining 0.11% at 0.5777 and faces the next support at 0.5506 (2020 low Mar.19) followed by 0.5402 (monthly low Oct. 2002) and then 0.5394 (monthly low Sep.2002). On the other hand, a breakout of 0.6228 (10-day SMA) would aim for 0.6302 (weekly high Mar.16) and finally 0.6414 (21-day SMA).
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