The AUDUSD is buying and selling at session highs and buying and selling up 0.70% on the day. The achieve is simply behind the NZDUSD which has moved up 0.80% to date at the moment.

The rise is being helped by a divergence of charges. The FOMC yesterday saved charges unchanged with what was perceived as a extra dovish tilt. Meanwhile, the RBA is scheduled to satisfy on November seventh with the bias tilting to an increase of 25 foundation factors to 4.35%.

Although the Australia 10 12 months yield is down Three bps at the moment to 4.797%, the yield has moved from 3.963% to 4.797% or 83 foundation factors since September 1. Meanwhile, the US 10-year yield has moved from 4.06% to 4.71% at the moment or 65 foundation factors. That is 18 foundation level distinction.

Taking a take a look at the 10 12 months spread between Australia and US 10 12 months yields, since October sixth, the spread between yields has transfer from -25.5 foundation factors to +8.6 foundation factors.

Traders are beginning to concentrate to the yield spread now with the AUDUSD pair up 5 of the final 6 days (see AUDUSD chart beneath). The transfer larger within the AUDUSD has the pair working away from the 200 and 100-hour MAs at 0.63425 and 0. 6355 respectively. It can be above the 100-bar transferring common on the Four hour chart at 0.63479 (see inexperienced line on the chart beneath), and the 200 bar transferring common on the identical chart at 0.63736. The worth is presently buying and selling at 0.6432 and approaching the excessive from October 11 at 0.6445.

The run larger has merchants desirous about the diverging yields and diverging central financial institution coverage. Technically, it is going to take a transfer above the October excessive at 0.6445, to get extra patrons concerned.

Risk for longs is now close to 0.6400.

So yield spreads are pointing to larger AUDUSD. Will the merchants leap on that pattern?

PS Also serving to is a danger on sentiment has improved which tends to assist the AUD.