AUD/USD reverses a brief dip below 0.7500 on RBA rate cut

Fresh offered emerged for the AUD/USD pair following RBA’s rate cut decision, sending the rate briefly below 0.75 handle, before recovering some ground to swing back above the last.

AUD/USD breaches 0.75 on RBA

Currently, the AUD/USD pair drops -0.34% to 0.7513, heading for a retest of 0.75 handle. The Aussie’s recovery from a knee-jerk downward spike to 0.7492 faltered near 0.7535 region, as the bears tightened grip amid a widely anticipated rate cut decision by the RBA this Tuesday. The RBA slashed its official cash rate by 25 bps to a record low of 1.5%.

However, limited reaction is witnessed in the major, as such a move was widely expected by markets in wake of dwindling economic growth, mixed labour market and rising AUD.

Moreover, dismal Australian trade and building consents data also continue to weigh on the Aussie. The Australian trade balance for June stood at -3.195 bn versus expected -2bn and prior -2.218bn. While the Building approvals data for June came in at -2.9% m/m vs. expected +0.8% and -5.2% last.

Markets will digest the RBA policy decision, with focus now shifting towards the US economic releases due later in the NA session for fresh momentum.

AUD/USD Levels to watch   

The pair finds the immediate resistance at 0.7552 (5-DMA) above which gains could be extended to the next hurdle located at 0.7600 (round figure). On the flip side, the immediate support located at 0.7485/66 (50 & 100-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7450 (psychological levels).