- AUD is finding no love despite the uptick in the Aussie 10-year yield.
- Trade tensions are likely capping the upside in the AUD.
- AUD/USD has been restricted to a narrow range since Aug. 8.
AUD/USD is currently trading unchanged on the day around 0.6777, having hit a high of 0.6788 a few minutes before press time.
The yield on the Australian government bond yield is currently trading at 0.933 basis points, representing a four basis point gain on the day and a more than ten basis point gain on the record low of 0.86 basis points hit on Friday.
So far, however, the recovery in the benchmark yield has failed to put a bid under the Aussie Dollar.
The upside is possibly being capped by the US-China trade tensions. The US President Trump downplayed recession fears on Saturday but said that he is not ready for a trade deal with China.
Even so, the Asian stocks are reporting gains with Japan's Nikkei index currently adding 0.80%. also, the futures on the S&P 500 are adding 0.40%. Therefore, the AUD could pick up a bid during the day ahead and rise to the 21-day moving average, currently at 0.6837.
Awaiting range breakout
The pair charted a Doji candle on Aug.7 and posted gains on the following day, confirming a bullish Doji reversal. The Aussie, however, has found no love in the last six trading days and has been restricted to a narrow range of 0.6822 to 0.6735.
A break above 0.6822 would open the doors for a corrective rally to levels above 0.69. On the other hand, a range breakdown would expose the recent low of 0.6677.
- R3 0.6819
- R2 0.6808
- R1 0.6793
- PP 0.6782
- S1 0.6767
- S2 0.6756
- S3 0.6741
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