By Charlotte Greenfield and Gyles Beckford
SYDNEY/WELLINGTON, July 30 (Reuters) - The Australian dollar was in firmer territory on Thursday on a surge of optimism over stabilising Chinese equity markets and rising commodity prices, but it had yet to clearly break the recent downward trend.
The Aussie rose to $0.7310 AUD=D4 , from its Wednesday low of $0.7282 and the week's six-year trough of $0.7257.
China stocks seemed to have steadied after Monday's sudden plunge as Beijing reiterated its determination to stabilise its volatile equity markets.
Sentiment has also been helped by a four-day rebound in prices for iron ore, Australia's biggest export earner, supported by firmer steel prices in the world's top producer.
However, the currency would need to break above layers of stiff resistance from $0.7350 to $0.7450 to $0.7500 cents to turn the technical outlook less bearish.
"The Aussie is still in a downtrend. It's not yet a correction as it is barely off its lows. We need to see it above $0.7450," said Greg Gibbs, senior strategist at the Royal Bank of Scotland (LONDON:RBS) in Singapore.
The New Zealand dollar's NZD=D4 recent run higher looked to have run out of puff as the currency settled around $0.6635 in the face of a firm greenback.
The kiwi had hit a high of $0.6739 after the head of the Reserve Bank of New Zealand reiterated the prospect of lower rates and the need for a lower currency, but scotched notions of drastic policy easing.
Attention is now on next week which has considerable event risk, including a Fonterra dairy auction and board meeting that may see a further downgrade to farmer incomes.
Near term kiwi support is around $0.6600, with resistance at $0.6720.
The only local data out showed a 4.1 percent fall in new dwelling approvals for June, the third consecutive month of softness.
New Zealand government bonds sold off in line with U.S. Treasuries, with yields 0#NZTSY= as much as 8.5 basis points higher at the long end of the curve.
Australian government bond futures fell, with the three-year bond contract YTTc1 off 6 ticks at 98.040. The 10-year contract YTCc1 was also down 6 ticks to 97.1100. (Editing by Jacqueline Wong)