- AUD/USD is trading tentatively with upside capped by key hurdle.
- China rate cut talks have failed to put a bid under the AUD.
AUD/USD continues to trade largely unchanged on the day around 0.6965 with the 50-day moving average (MA) capping upside.
MNI’s Barton put out a tweet a few minutes before press time quoting a leading analyst’s view that the People’s Bank of China has room to cut the reserve requirement ratio and may deliver targeted or across the board rate cuts in June or July.
It is worth noting that China is Australia’s largest trading partner and Australia is a leading source of resources for China. As a result, a slowdown in China has a negative impact on Australia’s economy and China stimulus talks tend to bode well for the AUD and other commodity currencies.
So far, however, the Australian Dollar has failed to pick up a strong bid, possibly because the investors see a low probability of the US and China reaching a trade deal or temporary truce at the G-20 meeting later this week.
The pair, however, may climb the 50-day moving average, currently at 0.6970 if the US consumer confidence data, due at 14:00 GMT today, prints well below estimates, reinforcing dovish Fed expectations and leading to a broad-based US Dollar sell-off.
Pivot levels
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