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AUD/USD Remains Positive on Chinese Stimulus Measures
China’s fresh monetary stimulus has strengthened the Australian Dollar, pushing AUD/USD to 0.6380. The move has improved investor sentiment, increasing demand for risk-sensitive assets. Since Australia relies heavily on trade with China, the stimulus measures have raised expectations of stronger demand for Australian exports. Additionally, the weaker US Dollar Index, which remains near 103.30 due to falling Treasury yields and trade tensions, has further supported AUD/USD’s upside momentum.
Investors are now watching key events that could impact AUD/USD’s direction. On Wednesday, the Federal Reserve’s policy decision is expected to keep interest rates steady at 4.25%-4.50%. Traders will closely analyze the Fed’s statement for hints about future rate cuts. A dovish tone could weaken the US Dollar further, giving AUD/USD more room to rise. Meanwhile, Australia’s employment data for February is set for release on March 20. This data will influence the expectations of the Reserve Bank of Australia’s (RBA) monetary policy. A strong labor market report could boost the Australian Dollar by reinforcing economic confidence.
Morever, the trade tensions remain a risk factor for AUD/USD. Ongoing uncertainties surrounding Washington’s trade policies have kept investors cautious. If the US imposes further tariffs on Chinese imports, Australia’s trade relationship with China could face challenges. Any escalation in trade conflicts might weaken risk sentiment and pressure AUD/USD. However, for now, China’s stimulus and expectations of steady Fed policy are driving bullish momentum in the pair.
The 4-hour chart for AUD/USD shows strong bullish momentum within a symmetrical broadening wedge pattern. The rebounding bottoms are observed around the $0.62 and $0.6270 levels and the price gains bullish momentum after forming rounding bottom. This bullish price structure indicates a potential move toward $0.6440. The strong surge in gold (XAU) prices and bearish pressure on the US Dollar Index also support a rally in the Australian dollar.
