The AUD/USD currency pair has seen a diminished bounce from its intraday low, despite Chinese Premier Li Qiang’s bullish outlook on China’s economy, as it sits at 0.6670 amidst a two-day downtrend. Ongoing Sino-US tensions over Taiwan and concerns about the Reserve Bank of Australia’s (RBA) future policy moves contribute to the decline.

Premier Li Qiang highlighted that China’s economic performance in March exceeded that of January and February. Nevertheless, he also expressed opposition to trade protectionism and decoupling, indirectly targeting the United States and increasing geopolitical tensions.

In other news, the National Australia Bank (NAB) has reduced its projection for the RBA’s peak rate to 3.85% from 4.15% following recent decreases in inflation and retail sales. NAB anticipates a 0.25% rate hike in April, while Westpac, Commonwealth Bank of Australia (CBA), and Australia and New Zealand Banking Group (ANZ) all foresee a pause in the RBA’s rate hike trajectory after April’s 25 basis point increase.

Despite Federal Reserve Chair Jerome Powell hinting at another rate hike and Fed Vice Chair for Supervision Michael Barr stressing data dependency, the US Dollar remains strong. Powell’s call for changes to deposit insurance also supports this trend. As a result, Fed hawks are vigilant but are waiting for further signals, increasing market anxiety ahead of Friday’s US Core Personal Consumption Expenditure (PCE) Price Index.

The AUD/USD pair is currently testing the critical support level at 0.6665. As mentioned in our previous report, in order to maintain the bullish trend for the upcoming period, the price needs to stabilize above this level. Failing to do so may result in additional bearish corrections, with the next target set at 0.6550.

Stochastic indicators present positive signals, suggesting that the expected bullish wave could resume today, with the next target being 0.6780.