AUD/USD hammered down to 0.76 handle post-RBA

The AUD/USD pair extended RBA decision-led sharp downfall and has now moved on the brink of breaking below the 0.7600 handle.

As was widely expected, the RBA decided to leave its key benchmark rate unchanged at a record low level of 1.5%. The central bank held its neutral stance but seems to have disappointed the market participants expecting for some hawkish commentary, especially after the recent shift by the ECB, BOE and BOC. 

   •  RBA: FX and rates market response to July rate decision - Westpac

Ahead of the RBA announcement, the pair traded with positive bias and was being supported by today's upbeat release of Australian retail sales, showing better-than-expected monthly gains of 0.6% for May. 

   •  Australia: Retail sales post solid gain - Westpac

Meanwhile, the prevalent softer tone surrounding commodity space, especially copper, has failed to extend any support to the commodity-linked currency. 

Adding to this, the recent upsurge in the US Treasury bond yields further weighed on higher-yielding currencies – like the Aussie, and did little to stall the pair’s ongoing slump to 4-day lows.

Technical levels to watch

Weakness below the 0.76 handle could get extended towards 0.7585 horizontal support, which if broken is likely to accelerate the slide back towards the very important 200-day SMA support near 0.7535-30 region.

On the upside, any recovery attempts might now confront immediate resistance near 0.7635-40 zone, closely followed by resistance near 0.7660 level. On a sustained move back above these resistance levels, the pair is likely to make a fresh attempt towards reclaiming the 0.7700 handle.