- AUD/USD is now trading in the green, having hit a low of 0.7164 earlier today.
- The AU-US 10-year yield spread is on the rise, thus the AUD may rise further.
- A close above 0.7192 is needed to validate Friday’s bullish outside day.
The AUD/USD pair seems to have picked up a bid, tracking the rise in the spread between the Australian and US 10-year government bond yields.
The currency pair is currently trading at 0.7180, representing a 0.10 percent gain on the day, having hit a low of 0.7164 earlier today.
Meanwhile, the 10-year yield spread is seen at -60 basis points; up eight basis points from Friday’s close of -68 basis points.
The fact that the uptick in the AUD is accompanied by an improvement in the AU-US yield differential indicates the pair could rise further, possibly above Friday’s high of 0.7192. A close above that level would add credence to the bullish outside day (candle) created on Friday and open the doors for a re-test of recent highs near 0.73.
More importantly, a bullish close looks likely as riskier assets appear to be cheering the US’ decision to soften its stance on China’s subsidies in a bid to secure a deal next month.
Technical Levels
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