AUD/USD: Bulls rescued by hawkish RBA Lowe, bounces-off 0.7400

The AUD/USD pair stalled its overnight sell-off just ahead of 0.74 handle, as hawkish tilt witnessed in RBA Governor Lowe’s speech offered the much-needed respite to the AUD bulls.

RBA Governor Lowe, in his scheduled speech, acknowledged rising concerns over the house prices and household debt, but at the same time stated that “Over time we could expect interest rates to rise in Australia and should not expect interest rates always to be this low”.

Earlier on the day, the Aussie met fresh supply near 0.7430 region and hit fresh 4-month lows on the back of dismal Australian trade balance data and yet another Chinese services PMI disappointment. Also, higher treasury yields on an optimistic Fed collaborated to the downbeat tone seen around the spot.

Attention now turns towards the US macro data lined up for release later today, while the main risk event for the major remains the RBA monetary policy statement and US payrolls data due on the cards this Friday.

AUD/USD Levels to watch   

At 0.7420, the pair finds the immediate resistance at 0.7450/61 (psychological levels/ daily pivot) above which gains could be extended to the next hurdle located 0.7477/93 (5 & 10-DMA) and 0.7522/38 (20 & 200-DMA). On the flip side, the immediate support is located at 0.7400 (zero figure). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7379/75 (classic S1/ Fib S2) and below that 0.7350 (early-Jan levels).