AUD/USD trims gains as yield spread favors USD

AUD/USD backed off from Asian session highs as AU-US 10-yr yield spread and 2-yr yield narrowed in favor of the US dollar.

Hovers around 0.7510

The spot was last seen trading around 0.7510 levels after having clocked a session high of 0.7530 levels. Broad based USD selling post Fed did help the pair recover from the low of 0.7420, however, the yield spread remains in favor of USD.

The 10-yr yield spread is largely unchanged on the day, but the 2-yr yield spread narrowed in favor of USD. Consequently, the bid tone appears to have run out of steam.

AUD/USD Technical Levels

A break above daily high of 0.7430 would open doors for 0.7571 (61.8% of 0.7835-0.7145). A violation there could yield 0.76 levels. On the other hand, a break below 0.75 would expose daily low of 0.7486, under which support at 0.7450 (38.2% of 0.6827-0.7835) could be put to test.