AUD/USD Forecast: Back above 0.7800 as RBA’s Lowe provides relief

AUD/USD Current Price: 0.7826

• RBA Governor Philip Lowe pledged “to assist with the smooth functioning of the market.”
• The focus now shifts to growth-related figures, as Australia will publish Q4 GDP.
• AUD/USD recovery points to a retest of the 0.8000 threshold.

The AUD/USD pair is trading near a daily high of 0.7833, despite the sour tone of US indexes. The pair advances on easing dollar’s demand and following an uneventful Reserve Bank of Australia. The central bank left the cash rate unchanged at a record low of 0.10% in its monetary policy meeting, as widely anticipated. Governor Philip Lowe reaffirmed the commitment to maintain the three-year yield target at 10 basis point, indicating that the central bank stepped in “to assist with the smooth functioning of the market.” Gold prices recovered some ground providing additional support to the Aussie.

On the data front, the country published January Building Permits, which contracted a whopping 19.4% YoY, much worse than anticipated. This Wednesday, the country will publish the February AIG Performance of Construction Index and the Commonwealth Bank Services PMI for the same month. Later into the session, the country will publish the Q4 Gross Domestic Product, foreseen at 2.5% QoQ from 3.3% previously.

AUD/USD short-term technical outlook

The AUD/USD pair holds on to daily gains and could extend its advance in the upcoming session, particularly if the pair holds above the 0.7810/20 region. The 4-hour chart shows that it has recovered above all of its moving averages, although the 20 SMA keeps heading firmly lower. The Momentum indicator heads higher just above its 100 line, while the RSI indicator has lost strength and currently stands around 53.

Support levels: 0.7815 0.7770 0.7730

Resistance levels:  0.7850 0.7890 0.7930

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