AUD/USD remains on the back foot below 0.5600 after RBA’s Lowe

AUD/USD trims the post-RBA recovery gains to 0.5565, down 3.6% after Governor Philip Lowe said the bank is already doing what is necessary ahead of the European session on Thursday.

Read: RBA’s Lowe: Doing all that we can to lower funding costs in Australia and support the supply of credit to business

While RBA’s rate cut and bond purchases helped the Aussie to recover from fresh 11-year low, the Aussie PM Morrison showed readiness that the government will announce further measures to combat the virus in the coming days. The national leader also signaled the travel ban to non-Australian, non-residents.

Earlier during the day, ECB announced a multibillion Euro package while the Fed also offered details of Money Market Mutual Fund Liquidity Facility (MMLF) to facilitate lending to financial institutions secured by high-quality assets purchased by those institutions from money market mutual funds.

Given the current rush to safeguard against the disease, the US dollar remains as the market favorite, mainly due to its reserve currency status. On the other hand, the moves offer volatile trading sessions amid downbeat performances of the Asian stocks.

Following the Asian action session, investors will pay attention to the US Philadelphia Fed Manufacturing Index and weekly Jobless Claims for intermediate clues. Though, major attention will be given to the coronavirus updates and the much-awaited US stimulus, likely worth $1.3 trillion as per the latest news.

Technical Analysis

The last few candles on the hourly chart portray the sellers’ exhaustion, which in turn could escalate the recovery moves towards the immediate resistance line near 0.5750. However, the bears are less likely to relinquish control unless AUD/USD prices cross the falling trend line from 2010, at 0.5915 now.