On the back of the RBA yesterday, Governor Lowe is speaking today and has again suggested that there is no strong case for a change of rates at the moment.

However, there is clearly a more neutral tone to what he is suggesting, which does now open the door for a rate decrease.

The market has been speculating that there is serious pressure on the RBA to cut rates on the back of weak inflation and falling property prices. Until now, Lowe has not been biting. It does look like the door is slightly ajar.

The key takeaway for me is the line that the probabilities on next rate move “appear to be more evenly balanced”. This is a clear change in stance from the RBA and the doves are taking back control.

Aussie Outlook

The AUD/USD has cracked the major level at 0.7200 and is now dumping. Obviously the dovish shift will hurt the AUD/USD, so this is a fundamental change for me.

I’ll be looking for more follow through over the session.

0.7050 and then 0.7000 are my next two key support levels below, with 0.7200 turning into key resistance.

0.7300 is R1 and the most recent highs sitting at 0.7400.