Aussie Rallies On Chinese Stimulus Promise

Lack of Detail at PolitburoThe keenly awaited Chinese Politburo meeting yesterday was a mixed bag for investors. On the one hand, commodities prices and local markets were seen rising as Chinese leaders promised more measures to help revive the economic recovery in China, signalling a rescue package to come later this year.  However, the lack of details was ultimately unfulfilling. In a statement released on the back of the meeting, the 24-member council noted that the country was undergoing a “torturous recovery” on the back of the pandemic. The statement went on to say that it was “necessary to actively expand domestic demand” and “expand consumption by increasing residents’ income”.More Measures but No Rescue Package YetThis latest guidance comes on the back of a wave of recent measures such as the easing of restrictions on mortgages as well as incentives to buy electronics and cars. However, with the market still awaiting a solid fiscal stimulus package, this latest headline is unlikely to have a lasting impact on markets. For now, though, commodities currencies are being boosted on the back of the meeting with AUD rising firmly. If we start to see more concrete details of a forthcoming stimulus package, this should provide some proper support for risk sentiment. Until then, tomorrow’s FOMC will remain the key focus.Technical ViewsAUDUSDThe correction lower in the Aussie has stalled for now, with price finding demand ahead of the .6681 level. Momentum studies are turning higher also, putting focus on the .6857 level and the bearish trend line. This is a key area for bulls and a break is needed here to open the way for a move to .7103 next.