AUD/USD looks to 0.7450 on Yuan rebound and China stocks rally

• Risk-on rally in the Asian stocks drives Aussie higher beyond the 0.7400 levels.
• Reserve Bank of Australia (RBA) maintains status-quo, tweaks inflation 2018 outlook.
• Focus on US data and China’s trade balance for the next direction.

The AUD/USD pair extends its bounce beyond the 0.74 handle following the RBA’s unchanged cash rate decision and amid a major turnaround in risk conditions, as the focus now shifts towards the Chinese trade figures due on the cards tomorrow for further momentum.

The higher-yielding currency, the AUD, tracked the rebound in the Chinese Yuan while the risk-on rally in China’s equity markets also boosted the upside. The rebound in the Chinese equities was driven by a strong close on the Wall Street, as upbeat earnings in the US offered some relief to markets amid escalating US-China trade row.

More so, the spot also found support from broad-based US dollar weakness and the resultant gain in the commodities’ prices, with Comex futures rallying +0.75% to $ 2.751 and WTI back above the $ 69 mark.

AUD/USD Technical Levels

FXStreet’s Analyst Omkar Godbole offered key technical levels for the Aussie: “Resistance: 0.7745 (50- day moving average), 0.7484 (July 10 high), 0.7531 (100-day moving average). Support: 0.7348 (Aug. 3 low), 0.7310 (July 2 low), 0.7184 (61.8% Fib R of 2001 low - 2011 high).”