AUD/USD is on the rise despite uptick in US yields
- AUD/USD is flashing green despite the four basis point rise in the US 10-year yield.
- The uptick in China's Yuan and signs of risk reset could be boding well for the AUD.
- Aussie Dollar may extend gains if China reports above-forecast trade data.
The AUD/USD pair is better bid in Asia despite the uptick in the US treasury yields.
As of writing, the pair is trading at 0.6782, representing 0.38% gains on the day.
Meanwhile, the yield on the US 10-year treasury note is trading at 1.75 percent – up five basis points from the low of 1.703% seen earlier today.
Aussie's gains could be associated with the signs of risk reset in the financial markets. At press time, the futures on the S&P 500 are reporting 0.35% gains.
Also, the uptick in China's Yuan may be helping the AUD stay bid. Currently, the USD/CNH pair (Yuan's offshore exchange rate) is trading at 7.06844, representing 0.21% losses on the day.
Traders await China data
The data due in a few hours is forecasted to show China's trade surplus narrowed to $40 billion in June from $50.98 billion in May. Outbound shipments are seen falling 2 percent year-on-year, while imports are expected to slide by 8.3%.
AUD/USD will likely rise above 0.68 if the China import and export numbers beat estimates by a big margin.
The Aussie, however, may come under pressure if China reports a big rise in the trade surplus with the US. That will likely draw US President Trump's ire, possibly leading to further escalation of trade tensions between the two nations.
Technical analysis
AUD/USD created a long-tailed Doji candle yesterday, as it recovered sharply from the 10-year low of 0.6677 to close largely unchanged on the day at 0.6756.
The long-tailed Doji indicates seller exhaustion, as it has appeared following a sell-off from the July 19 high of 0.7082. Further, the 14-day relative strength index is reporting oversold conditions with a below-30 print.
All-in-all, a corrective bounce above 0.68 could be seen.
Pivot points