- AUD/USD’s upside faltered ahead of 0.6400.
- The PBoC reduced rates, lending support to AUD.
- RBA’s Lowe expected to speak on Tuesday.
The Aussie dollar is extending the upside momentum at the beginning of the week, motivating AUD/USD to flirt with the 55-day SMA in the 0.6370/80 band at the time of writing.
AUD/USD focused on Lowe, China
AUD/USD remains bid in the upper end of the recent range, trading at the same time at shouting distance from monthly tops in the mid-0.6400s.
The positive performance of the Aussie dollar stays underpinned by the recent interest rate cut by the PBoC, all aimed at providing extra stimulus to the economic recovery in the aftermath of the coronavirus pandemic in the country. In fact, and anticipated by market participants, the PBoC cut the Loan Prime Rate (LPR) by 20 bps on Monday, taking it to 3.85% (from 4.05%).
The pair found extra support from the steady/bearish performance of the greenback, as scepticism on Trump’s plan to re-ignite the economic activity keeps running high.
Moving forward, RBA Governor P.Lowe is due to speak on Tuesday, while flash manufacturing and services PMIs will close the weekly calendar on Thursday.
AUD/USD levels to watch
At the moment the pair is advancing 0.21% at 0.6372 and a breakout of 0.6444 (monthly high Apr.14) would aim for 0.6596 (100-day SMA) and finally 0.6684 (monthly high Mar.9). On the flip side, the next support emerges at 0.6263 (weekly low Apr.16) seconded by 0.5980 (monthly low Apr.3) and then 0.5506 (2020 low Mar.19).
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