Aud Subdued On China Stimulus

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Aud Subdued On China Stimulus

Australian Dollar (Aud) Subdued On China'S Stimulus Plan

The Australian Dollar (AUD) is under pressure and remains muted against the USD on Tuesday. The Australian Dollar (AUD) is weighed down by China's fiscal stimulus plan and the weak trade balance data.

As China is a major trading partner of Australia, any weakness in the Chinese economy directly affects the Australian Dollar (AUD). The recent stimulus plan lacked details and failed to impress the investors.

Consumer Confidence Remains Unchanged

In Australia, the Consumer Confidence weekly survey was released, and it showed a reading of 83.4. This was similar to the earlier reading and showed no change in consumer confidence.

Although the reading of the Consumer Confidence remains unchanged, the long-term trend reveals that it has been below 85 for the 89 weeks in a row.

Right now, the US Dollar is gaining support in the hope that the US Fed will go with another oversized rate cut. CME FedWatch Tool reveals that the chances of a 0.25% rate cut in November are only 83.6%. The chances of a 0.50% rate cut in November are slim to none.

Technical analysis shows that AUD/USD is trading near 0.6730 inside a descending channel pattern. It seems that the AUD/USD is trying to test the upper trendline of the descending channel, which is a sign of bullish momentum.

If the AUD/USD breaks out of this price channel, it will be a trend shift and will showcase the AUD's strength. However, the RSI is still below 50, which means that AUD bulls will have to wait.

However, if the AUD/USD breaks out of the price channel, the first hurdle will be 0.6758, which is where the 9 EMA is located. After that, the next stop for the AUD/USD will be at 0.6800.

On the flip side, the first support is around 0.6630, which is the lower end of the price channel. After that, the next support is 0.6622 which is the 8-week low for the AUD/USD.

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