AUD/USD climbs above 0.6400 amid hopes of more policy support from China

AUD/USD stretches recovery above 0.6400 as investors see more policy support coming from China.
Overall market sentiment is still bearish and has pushed 10-year US Treasury yields to 4.30%.
The USD Index prints a fresh two-month high as Fed policymakers remained cautious about significant upside risks to inflation.

Sagar Dua FXStreet

The AUD/USD pair extends its recovery above the round-level resistance of 0.6400 in the European session. The Aussie asset manages to challenge the downside bias as investors hope for fresh policy support from the Chinese authority to diminish threats of an economic slowdown prompted by the vulnerable housing sector and poor household demand.

S&P500 futures post some gains in London, portraying an improvement in the risk appetite of the market participants. Nominal improvement in the risk-taking capability of investors is fragile amid rising deflation risks in China. Overall market sentiment is still bearish and has supported US Treasury yields. The returns offered on 10-year US Treasuries jumped to 4.30%.

A sense of optimism among investors has stemmed from expectations of more supportive fiscal policy from the Chinese government, which looks set to deliver a weak growth rate in the July-September quarter. Investment banking firm Morgan Stanley lowered its forecast of China’s Gross Domestic Product (GDP) for the current year to 4.7% vs. an earlier projection of 5.0%.

Policymakers in a Cabinet meeting on Wednesday said China would continue to introduce policies to boost consumption and promote investment, following mounting economic woes with a prolonged property crisis, deflationary pressure, and slower growth in retail sales and industrial output, reported Reuters. The Australian Dollar as a proxy to China’s economic growth capitalizes on the announcement.

Meanwhile, the US Dollar Index (DXY) delivers a lackluster performance after printing a fresh two-month high around 103.60. The strength in the US Dollar came after Federal Reserve (Fed) policymakers remained cautious about significant upside risks to inflation due to upbeat consumer spending and wage growth.

AUD/USD

Overview
Today last price	0.6417
Today Daily Change	-0.0007
Today Daily Change %	-0.11
Today daily open	0.6424

Trends
Daily SMA20	0.6608
Daily SMA50	0.6688
Daily SMA100	0.6675
Daily SMA200	0.6737

Levels
Previous Daily High	0.648
Previous Daily Low	0.6416
Previous Weekly High	0.6617
Previous Weekly Low	0.6486
Previous Monthly High	0.6895
Previous Monthly Low	0.6599
Daily Fibonacci 38.2%	0.6441
Daily Fibonacci 61.8%	0.6456
Daily Pivot Point S1	0.64
Daily Pivot Point S2	0.6375
Daily Pivot Point S3	0.6335
Daily Pivot Point R1	0.6464
Daily Pivot Point R2	0.6505
Daily Pivot Point R3	0.6529

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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