Australian Dollar strengthens on improved sentiment despite lingering China risks

• AUD/USD trades around the 0.6400 zone, rebounding strongly during Wednesday's American session.
• Analysts flag that AUD remains vulnerable due to its China exposure and likely May RBA rate cut.
• Key resistance is seen near 0.64100, with technical indicators mostly aligned to the upside.

The Australian Dollar (AUD) regained ground on Wednesday, lifting toward the 0.6400 area during the American session, as improving risk sentiment and a broadly weaker US Dollar (USD) helped AUD/USD shake off recent losses. Earlier gains were fueled by optimism around Chinese GDP, which grew 5.4% year-over-year in Q1, surpassing forecasts. However, the rebound remains fragile amid ongoing US-China trade tensions and the Aussie's role as a proxy for Chinese demand.

ING strategists continued to emphasize that the Aussie remains exposed as a barometer of the US-China trade dispute, noting that while the RBA is likely to ease policy next month, the bigger driver for AUD continues to be developments in trade and commodities. Domestically, the Australian economy faces pressure from global decoupling, and the RBA's expected May rate cut could keep upside limited.

Daily digest market movers: Gold price surges while US Dollar slumps

• Gold posted a fresh record near $3,333 per ounce, supported by safe-haven demand and lower Treasury yields.
• US Retail Sales rose 1.4% MoM in March to $734.9B, slightly above market expectations; YoY sales up 4.6%.
• Trump directed a probe into possible tariffs on all critical mineral imports, citing national security concerns.
• China retaliated with new export licensing for rare earths, increasing economic pressure on key US sectors.
• Q1 GDP in China surprised to the upside at 5.4% YoY; March activity indicators also beat forecasts.
• Chinese officials signaled a willingness to resume trade talks if the US adopts a more respectful tone.
• The Australian Dollar remains tied to US-China tensions, limiting potential upside despite strong risk appetite.
• RBA is still expected to cut rates in May, but China proxy status makes AUD vulnerable to external headwinds.
• The DXY trades defensively near the 99.70 zone, failing to benefit meaningfully from upbeat US data.
  

Technical analysis: AUD/USD maintains upside bias

The AUD/USD pair is flashing a bullish technical outlook after rallying into the 0.64 region. The Moving Average Convergence Divergence (MACD) indicator is generating a fresh buy signal, while the Relative Strength Index (RSI) hovers near 59, in neutral-positive territory. Supporting the bullish tilt are several key moving averages: the 10-day EMA at 0.6264, 10-day SMA at 0.6202, 20-day SMA at 0.6244, and 100-day SMA at 0.6289--all pointing upward. Only the longer-term 200-day SMA, positioned at 0.6480, remains tilted downward, suggesting some resistance may persist further up the curve.

Despite some conflicting signals from the Commodity Channel Index and the Stochastic Oscillator--both showing neutral readings--the overall structure favors a continuation higher if momentum holds. Immediate support lies near 0.6325 and 0.6288, while resistance can be seen at 0.6412, followed by 0.6479.