Why Is AUD/USD Surging? Chinese Stimulus Sparks Risk Rally

Chinese economic stimulus measures trigger risk-on sentiment,is dogecoin a meme coin propelling the Australian Dollar higher against its US counterpart.

Market participants await crucial economic indicators including Fed policy decisions and Australian employment data for directional cues.

Technical analysis reveals bullish breakout patterns with AUD/USD clearing critical resistance levels.

The Australian Dollar demonstrated remarkable strength in Monday's trading session, with AUD/USD climbing to three-week highs following China's announcement of fresh monetary stimulus measures. This development injected optimism into markets, particularly benefiting commodity-linked currencies like the Aussie that maintain strong trade ties with China.

Several fundamental factors contributed to the pair's upward trajectory. The US Dollar Index (DXY) remained subdued near multi-month lows around 103.30, pressured by ongoing trade uncertainties and declining Treasury yields. Meanwhile, China's stimulus package specifically targeted at boosting domestic demand created favorable conditions for risk-sensitive assets throughout the Asia-Pacific region.

Key Market Drivers Influencing AUD/USD Movement

  • The Australian Dollar extended its Friday rally, with AUD/USD testing the upper 0.6300s range as market participants digested China's economic support measures
  • Trade policy uncertainties continue influencing currency markets, particularly regarding potential retaliatory measures from US trading partners that could impact global commerce
  • Federal Reserve policy expectations remain in focus, with consensus anticipating unchanged rates at 4.25%-4.50% during Wednesday's announcement
  • Upcoming Australian employment data (scheduled for March 20) could provide critical insights into potential Reserve Bank of Australia policy adjustments

Technical Perspective: Bullish Signals Emerge

AUD/USD's technical landscape turned decidedly bullish during Monday's session. The pair successfully breached both the 20-day and 100-day Simple Moving Averages (SMAs), establishing these levels as new support zones. Momentum indicators strengthened considerably, with the Moving Average Convergence Divergence (MACD) printing fresh green bars signaling increasing upward pressure.

The Relative Strength Index (RSI) climbed to 63, entering firmly bullish territory and confirming growing buying interest among market participants. Current price action suggests potential for further gains, with immediate resistance observed near the 0.6420 level. Should bullish momentum persist, traders may look toward testing higher psychological barriers in subsequent sessions.