• Comments from a senior Chinese official for more stimulus helps the Australian dollar.
• The recent update of daily virus infections ease in Beijing, favors the AUD.
• Mixed signals over the Russia-Ukraine peace talks and the Fed’s verdict can act as a bearish catalysts for the pair- AUD/USD.

Australian dollar trades high against the American dollar during Wednesday trading session. China’s hopes for more stimulus and upbeat China covid news favors the pair. However mixed concerns over Ukraine-Russia peace talks and pre-Fed anxiety can challenge’s the AUD/USD bulls.

Comments from a senior Chinese official boosted hopes for more stimulus, favored Aussie. inhua news agency cited Vice Premier Liu He saying China will roll out policy steps favourable for its capital markets.

Adding strength to the Aussie, came the Upbeat China covid update. As per retuers, “China reports 1,952 new coronavirus cases on March 15 versus 3,602 a day earlier.”

On the other hand, mixed signals on the Russia – Ukraine crisis is the major bearish catalyst. Fed’s policy meeting also undermines the quote.

As per Reuters, Ukrainian President Volodymyr Zelenskyy said on Wednesday that the positions of Ukraine and Russia at peace talks were sounding more realistic. Whereas  Russian President Vladimir Putin said Kyiv is not serious about finding a mutually acceptable solution.

Further as per the recent updates, Ukraine is likely to request more weaponry helps from the US, which will be approved by US President Joe Biden, as signaled by the Wall Street Journal (WSJ). The mixed comments troubles the traders when they read Russia-Ukraine crisis.

Fed’s policy meeting is due on later Wednesday where a quarter point rate hike is fully expected, and markets are braced for hawkish forecasts of at least five hikes this year. There was a also a good chance Fed members will lift estimates of the peak for rates, which could further undermine bonds globally and support the U.S. dollar. The only positive for the Aussie is that so much is already priced in it will be hard for the Fed to really shock markets.

AUD/USD 4 Hour Chart:

Support: 0.7164 (S1), 0.7133 (S2), 0.7102 (S3).

Resistance:  0.7226 (R1), 0.7257 (R2), 0.7288 (R3).

Moving on, Traders will watch US Retail Sales for February for further direction, however Fed verdict will be the main catalyst. In the meantime, we expect a bullish trend for AUD/USD.