AUD/USD: Range play continues even as Aussie bond yields hit 3.5-month high


  • AUD/USD remains trapped in 0.6930-6877 trading range. 
  • The Aussie 10-year yield has hit the highest level in over three months. 
  • The low odds of a year-end RBA rate cut favor upside break. 

The AUD/USD pair remains trapped in a narrow range despite the uptick in the Aussie government bond yields. 

The pair is currently trading largely unchanged on the day at 0.6896, having hit a low of 0.6886 a few minutes before press time. Notably, the pair has been restricted to a range of 0.6930-0.6877 since Oct. 31.

A range breakout looks likely if we take into account the multi-month highs in the Aussie government bond yields. The 10-year yield is currently trading at 1.254%, the highest level since July 25, representing a 17 basis point gain on the low of 1.08 registered on Nov. 1.

So far, however, the rise in the Aussie government bond yields has failed to put a strong bid under the AUD and so has the easing of US-China trade tensions. 

That said, the probability of an upside move still looks strong, courtesy of the falling odds of a year-end rate cut by the Reserve Bank of Australia. The market is currently pricing just 23% chance of a rate cut in December. The central bank kept rates unchanged on Tuesday and sounded less dovish by signaling a pause in rate cut cycle. 

Technical levels

AUD/USD

Overview
Today last price 0.6897
Today Daily Change 0.0003
Today Daily Change % 0.04
Today daily open 0.6894
 
Trends
Daily SMA20 0.6832
Daily SMA50 0.6804
Daily SMA100 0.685
Daily SMA200 0.6953
 
Levels
Previous Daily High 0.6929
Previous Daily Low 0.686
Previous Weekly High 0.693
Previous Weekly Low 0.681
Previous Monthly High 0.693
Previous Monthly Low 0.667
Daily Fibonacci 38.2% 0.6903
Daily Fibonacci 61.8% 0.6886
Daily Pivot Point S1 0.686
Daily Pivot Point S2 0.6825
Daily Pivot Point S3 0.6791
Daily Pivot Point R1 0.6929
Daily Pivot Point R2 0.6963
Daily Pivot Point R3 0.6998

 

 

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