FxWirePro: AUD/USD extends gains above 38.2% Fib, stronger yuan and risk-on mood underpin Aussie

AUD/USD chart - Trading View 

AUD/USD was trading 0.27% higher on the day at 0.7490 at around 05:30 GMT. A stronger yuan and risk-on mood underpin Aussie.

The People’s Bank of China (PBOC) maintained the one-year loan prime rate (LPR) at 3.85% for the 18th month in a row at its October fixing.

Meanwhile, the five-year LPR was also left unchanged at 4.65% in October, inline with market expectations. 

Chinese yuan rises in the aftermath. Further, IMF's comments on Evergranda’s risk soothes investor nerves, boosting sentiment.

International Monetary Fund’s China mission Chief and Assistant Director in the Asia and Pacific Department, Hedge Berger said that Evergrande risk to China is contained for now. 

On the data front overnight, U.S. homebuilding data showed an unexpected fall in September, keeping the USD under pressure. 

Building permits dropped to a one-year low amid acute shortages of raw materials and labour, supporting expectations that economic growth slowed sharply in the third quarter.

The dollar index DXY is spiraling lower for the 6th straight session, was trading 0.07% lower on the day at 93.72 at the time of writing.

AUD/USD is extending gains above 38.2% Fib and bullish momentum is likely to carry the pair higher to test 200-DMA at 0.7563.

5-DMA is immediate support at 0.7440. Breach below 110-EMA support at 0.7409 will change near-term dynamics.