AUD/USD trying to hang on following GDP miss
- Aussie softens on RBA's dovish Lowe, disappointing GDP figures.
- Market sentiment takes a plunge with Gary Cohn's announced resignation from White House team.
The AUD/USD is trying to rebound following a tumble on risk aversion in the overnight session, testing back into 0.7785 in the early Tokyo markets.
The Aussie has having a bad Wednesday so far, with a dovish showing for the Reserve Bank of Australia's (RBA) governor Philip Lowe, market sentiment retreating on the news that Mark Cohn is set to resign as president Trump's top economic advisor, and a miss on Aussie GDP figures for 2017's fourth quarter.
The RBA's Lowe gave a speech late Tuesday and his words amounted to nothing new for markets. High levels of household debt, an uneven housing market, and nonexistent real wage growth is leaving Australia's growth prospects on the bottom shelf, leaving the island continent to lag behind global growth trends. The RBA is still being expected to hold rates well into 2019. Taking the top off of market risk today is Mark Cohn's announcement that he is resigning from the White House as a top economic advisor to Donald Trump. Despite Cohn's insistence that no particular single incident is responsible for the move, it's very likely tied into Trump's tariff announcement last week, which flies heavily in the face of Cohn's free-trade stance.
The Aussie also saw GDP figures come in for the final quarter of 2017, with both annual and quarterly figures missing the mark. Year-on-year GDP came in at 2.4% versus the expected 2.5% (previous 2.8%), and quarterly dropped to 0.4% against the anticipated 0.6% (previous 0.6%). Market reaction has been to the downside but sedated, as markets are still bouncing back from earlier's risk-off ejection.
AUD/USD Technicals
The pair is back into it's 200-day SMA, and the decline from late January's high looks set to continue, with H4 candles marking in consecutive lower highs and lower lows, with today's move potentially setting up a new turnaround from 0.7842. Intraday support is holding at 0.7725 and 0.7710, with resistance at 0.7820 and 0.7860.