AUD/USD: Correlated Instruments Back Higher Rate

The progressive recovery in the Aussie continues to be a function of a neutral to weak USD, along with higher Gold prices.

What's more, the Australian vs US 10-yr yield spread trades near the highs of the week, in line with global DM rising yields, also assisting the reshuffling of portfolios into a more appealing Aussie.

The latest push higher in the US session was quite impulsive in nature vs the current pullback in Asia, much more compressive; it bodes well for a trend continuation.

Looking at Thursday's action so far, renewed buying interest in gold, which has broken into new highs, should be seen as a positive input for the Aussie, as the unwinding of shorts continues amid an ease in EM currencies.

Buying on dips is the preferred strategy as the price action and the structure of other correlated assets stand. However, this view collisions with the big picture, where the market is bearish and may soon come under macro pressure as 0.73 comes into focus.

Trade safe!