AUD/USD Price Analysis: Aussie keeps gains after PBOC rate decision

• AUD/USD’s recovery rally continues as S&P 500 futures turn positive. 
• The PBOC kept key interest rates unchanged, as expected. 
• Technical charts maintain bearish bias despite AUD’s bounce. 

The Aussie dollar, a proxy for China, remains bid following the People’s Bank of China’s (PBOC) status quo rate decision. 

The central bank kept the one-year and five-year loan prime rates unchanged at 3.85% and 4.65%, respectively. The bank was expected to maintain rates unchanged and has failed to have a notable impact on the Aussie dollar. 

The AUD/USD pair is trading at session highs near 0.6845, having put in a low of 0.6807 in early Asia. The pair had gapped lower, tracking the decline in the S&P 500 futures. The stock futures fell as the US and Germany witnessed a faster increase in the number of coronavirus cases over the weekend and Australia reimposed coronavirus restrictions in its second-most populous state. 

The US stock futures, however, erased losses and are reporting a 0.35% gain at press time. The turnaround likely helped the AUD bounce from the session low of 0.6807 to 0.6845. 

However, from a technical analysis standpoint, the pair needs to move above the lower high of 0.6976 created on June 16 to revive the immediate bullish view. The 5 and 10-day simple moving averages have produced a bearish crossover and could offer stiff resistance. The SMAs are currently located at 0.6861 and 0.6890, respectively. 

A reversal lower from the short-term SMAs would bring in deeper declines to the 200-day SMA, currently at 0.6662. 

Daily chart

Trend: Bearish

Technical levels