AUD/USD reverses sharply to 0.7160 ahead of RBA’s Lowe

• Dead cat bounce on RBA monetary policy decision?
• Markets book profits ahead of RBA Governor Lowe’s speech.

The AUD/USD pair returns to the red zone in the European session and looks to test the 0.7150 support zone on the back of unabated US dollar buying across the board.

Markets seek safety in the US currency, as the risk sentiment remains fragile amid ongoing Emerging Markets (EM) currency crisis and global trade tensions. The US dollar index jumped to 95.56, the highest levels in two weeks, having consolidated briefly near 95.20 region.

Meanwhile, a profit-taking slide heading into the Reserve Bank of Australia (RBA) Governor Lowe cannot be ruled out after the Aussie sought temporary relief from the RBA’s mild optimism on the Australian economic prospects. Earlier today, the RBA maintained status-quo for the twenty-third meeting in a row, keeping the Official Cash Rate (OCR) unchanged at a record low of 1.50%.

Markets eagerly await the speech by Lowe for some fresh trading impetus while the USD dynamics and weaker copper prices will continue to undermine the OZ currency.

AUD/USD Technical Levels

According to Denis Joeli Fatiaki, Chief Market Analyst at Leo Prime, “The Australian dollar's recovery is starting to fade away as prices slipped below 0.71928 and heads down to 0.71750. The pair needs to hold above 0.71928 to head back up. The pair also needs to maintain above 0.71750 to avoid falling further to 0.71630. Support: 0.71750 and 0.71630. Resistance: 0.71928, 0.72120, 0.72306, and 0.72527.”