AUD/USD hammered down to near 2-week lows, below mid-0.7100s

   “¢   RBA’s Lowe opens the door for a rate cut and prompts some aggressive selling.
   “¢   A follow-through USD buying collaborates to the heavily offered tone.
   “¢   Technical selling below the 0.7200 handle further aggravates the downfall.

The AUD/USD pair extended its sharp intraday slide and has now dropped to near two-week lows, south of mid-0.7100s.

After yesterday post-RBA attempted bounce, the pair met with some fresh supply during the Asian session on Wednesday after the RBA Governor Philip Lowe opened the door for a possible rate cut by saying that rates could go in either direction.

In his first public appearance of the year, Lowe acknowledged increasing economic risks at home and abroad, and prompted some aggressive selling around the domestic currency, sending the pair tumbling lower by over 110-pips from an intraday high level of 0.7246.

Adding to this, a follow-through buying interest surrounding the US Dollar, which has now recovered all of its losses that came after a dovish FOMC message last week, exerted some additional downward pressure and further collaborated to the sharp intraday slide.  

Meanwhile, possibilities of some short-term trading stops being triggered on a sustained weakness below the 0.7200 handle could also be one of the factors aggravating the ongoing downward momentum to the lowest level since January 25th.

It would now be interesting to see if the pair is able to find any support at lower levels or the current fall marks the resumption of the prior depreciating move amid relatively thin US economic docket, rather absent relevant market moving economic releases.

Technical levels to watch