The trade: Australian dollar surges amid US-China trade optimism

(AI video summary)

This video was created on 7 May for IG audiences by ausbiz.

Aussie dollar finds strength on multiple tailwinds

The Australian dollar (AUD) has pushed above $0.65 since December, supported by a weakening United States (US) dollar  and potential US-China trade talks.

There is a V-shaped bottom in the Aussie dollar at the 0.5914 low – often a good indicator of medium-term lows. With the AUD now trading above its 200-day moving average (MA), the target is around 0.6770, where the 200-week MA sits.

ASX 200 demonstrates remarkable resilience

The Australia 200 has rebounded above its 200-day MA at 8140.  Despite May historically being volatile with typical 3-5% pullbacks, markets can go sideways within a generous range. The Australia 200 should trade between 8050 and 7750 in the coming weeks.

Nasdaq 100 tests crucial 200-day MA

The US Tech 100 (Nasdaq) hit its 200-day MA to the pip three nights ago and has stalled. While the index remains below this level, the rally may have already priced in considerable good news. Whether it breaks above or remains below this key level will determine its next direction.

Commodities show strength amid global tensions

Brent crude oil has surged approximately 3% overnight, reflecting signs of higher demand in Europe and responding to geopolitical tensions as Israel discusses entering Gaza. The market has held support around $55-  $56, the low struck in April.

Gold continues rallying toward $3500. The recent price action suggests the pullback was merely a correction, with potential to target $3750 amid global uncertainties.

Bitcoin consolidates gains ahead of potential breakout

Bitcoin has stabilised around $93,000. After eight consecutive weeks of gains, it appears to be consolidating before its next leg higher. Watch for a move above $100,000 as a signal for the next upward move.