S&P Emini futures traded to 2,995 this morning in Asia as risk assets are in strong demand.
Hopes of an economic recovery resulting from an easing of coronavirus lockdowns and other restrictions are crowding out concerns of an escalation in tensions between the U.S. and ChinanL4N2D72UL.
Adding to the buoyant mood in Asia was a promise by the PBOC to strengthen policy stimulus to help speed up China's economic recovery nB9N2D300S.
The test will come later today when the U.S. returns from a three-day holiday.
If the S&P 500 convincingly breaks above the 200-day moving average at 3,000 it will likely force cashed up investors back into equities for fear of missing out (FOMO). BofA's May fund manager survey last week stated that the pain trade for equities was a break above 3,020 in the S&P nL4N2D24JB.
The AUD/USD has been tracking the S&P since the start of the coronavirus crisis nL4N2D106G.
If the index sustains a break above 3,000, the AUD/USD would likely make a run at its 200 DMA around 0.6660.
A break above the 76.4 Fibonacci retracement of the 0.7032-0.5510 decline at 0.6672 targets a complete retracement to the Dec 31 high at 0.7032.