AUD/USD remains steady after Trump tones down China rhetoric, DXY recovers slightly

• AUD/USD holds firm near 0.6500 on Friday as Trump's softer China stance lifts risk sentiment.
• Trump says 100% tariffs on Chinese imports "not sustainable," plans to meet Xi at the APEC Summit in South Korea.
• The US Dollar Index recovers modestly from two-week lows but remains on track for weekly losses.

The Australian Dollar (AUD) remains well bid against the US Dollar (USD) on Friday, as US President Donald Trump's softer stance on trade with China eases risk sentiment. The Aussie is showing resilience even as the Greenback strengthens, supported by Australia's close trade ties with China.

At the time of writing, AUD/USD is holding firm around the 0.6500 psychological level, rebounding from an intraday low of 0.6443. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is recovering modestly from two-week lows, trading around 98.45, but remains on track for weekly losses.

US President Donald Trump said on Friday that his plan to impose 100% tariffs on Chinese imports "is not sustainable," signaling a willingness to ease tensions between the world's two largest economies. He also confirmed plans to meet Chinese President Xi Jinping at the upcoming APEC Summit in South Korea.

From a technical perspective, AUD/USD broke below the neckline of a Head and Shoulders pattern last week, confirming a bearish continuation setup. Since then, the pair has traded in a relatively narrow range between 0.6450 and 0.6520, reflecting consolidation after the breakdown.

Immediate support is seen near the weekly low around 0.6440. A decisive move below this area could expose the multi-month horizontal support near 0.6400, which represents the next key downside target.

On the upside, initial resistance lies at the 0.6500 handle, followed by the 50-day Simple Moving Average (SMA) near 0.6550, which also aligns with the former neckline of the Head and Shoulders pattern. Only a break and daily close above this confluence zone would negate the bearish setup and shift the short-term structure back to bullish.

Momentum indicators remain slightly bearish, with the Relative Strength Index (RSI) hovering near 42, suggesting that while the downside pressure has eased, recovery attempts may face resistance unless broader risk sentiment improves.