FxWirePro: AUD/USD refreshes 5-month high above 0.70 handle, risk-on buoys Aussie

Chart - Courtesy Trading View 

AUD/USD was trading 0.19% lower on the day at 0.6963 at around 10:00 GMT, outlook is bullish.

The Australian dollar broke past 0.70 handle earlier on Monday, buoyed by pick-up in market sentiment. 

Higher commodity prices from China's rapid reopening and signs that global inflation has peaked boosted commodity currencies.

China's reopening will help Australia avoid recession through the removal of trade curbs on Australian goods and the return of Chinese students and tourists.

On the data front, China's on Tuesday is expected to report its Q4 GDP figures, which economists polled by Reuters expect to slow to 1.8% from 3.9% in the previous quarter.

Further, optimism soars for policy easing by the People’s Bank of China (PBoC) to support bold steps of reopening and supporting weak housing demand.

The consensus forecast is factoring in the possibility of a 5-15 bps decline in the 5Y LPR at the upcoming fixing on 20 Jan, which will reduce mortgage costs for homebuyers.

AUD/USD has formed a Doji on the daily candle at the time of writing. Price action is extending gains above 200-DMA.

Momentum is bullish, volatility is high and rising. MACD and ADX support upside in the pair. Scope for further gains.