AUD/USD mildly bid at 0.71 even as RBA's Lowe reiterates shift to neutral

AUD/USD continues to trade in the green in Asia despite RBA's Lowe reiterating that the probability of rates going up or down is broadly balanced.

The central bank head, while testifying before the House of Representatives' Standing Committee on Economics, in Sydney, said that the central scenario remains a reasonable one as the strong labor market is supporting spending, still, rates are unlikely to go up this year.

Dr. Lowe added that if the jobless rate drops below the current level of 5 percent, there may be a case for a higher interest rate. The bank, however, may cut rates if the national economy softens, and unemployment rises.

Essentially, the governor has merely reiterated the neutral shift communicated to markets on Feb. 6, leaving the AUD pairs unaffected.

As of writing, AUD/USD is trading at 0.7104, having clocked a high and low 0.7115 and 0.7086 earlier today.

Looking ahead, the path of least resistance is to the downside, courtesy of growing calls for an RBA rate cut this year. On Thursday, Westpac shifted grounds with a new prediction that the RBA will cut rates by 25 basis points in August and November.

• RBA's Lowe: Rate outlook more evenly balanced, hike next year may be appropriate
• RBA's Lowe testifies: Central scenario is 3% GDP growth this year

Technical Analysis

The pair carved out a big bearish outside day yesterday, engulfing the price action seen in the previous five trading days. A close below 0.7070 (yesterday's low) would validate that bearish outside day and open the doors for a deeper drop to 0.70.