AUD/USD drops and pops on RBA's Lowe's remarks on unorthodox policy

AUD/USD dropped to 0.6789 after RBA's Lowe said the bank is ready to do unconventional policy.
Lowe said the central bank is hoping to avoid hitting the zero lower bound, helping the AUD rise back to session highs.

Omkar Godbole FXStreet Contributor

AUD/USD fell from 0.6812 to 0.6789 in five minutes to 00:30 GMT in response to dovish comments by Reserve Bank of Australia's Governor Lowe.

"The central bank is prepared to do unconventional policy if required," Lowe said while testifying before the House of Representatives' Standing Committee on Economics.

Lowe added further that Australian interest rates may hit the zero lower bound, although the central bank wants to avoid doing that.

The final comment likely put a bid under the AUD, pushing the pair back to session highs above 0.6810.

As of writing, the pair is trading at 0.6812. A bullish hammer reversal pattern created in the previous two days indicates the path of least resistance is tot he higher side.

The bullish setup, however, would fail if China's producer price inflation, due in a few minutes, prints well below estimates. The AUD will also take cues from the RBA's statement of monetary policy, scheduled for release at 01:30 GMT.

Pivot points

1. R3 0.6909
2. R2 0.6866
3. R1 0.6833
PP 0.679
1. S1 0.6757
2. S2 0.6714
3. S3 0.6681

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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