AUD/USD: Sidelined despite the rise in Aussie 10-yr bond yield

• AUD is finding no love despite the uptick in the Aussie 10-year yield.
• Trade tensions are likely capping the upside in the AUD.
• AUD/USD has been restricted to a narrow range since Aug. 8.

AUD/USD is currently trading unchanged on the day around 0.6777, having hit a high of 0.6788 a few minutes before press time.

The yield on the Australian government bond yield is currently trading at 0.933 basis points, representing a four basis point gain on the day and a more than ten basis point gain on the record low of 0.86 basis points hit on Friday.

So far, however, the recovery in the benchmark yield has failed to put a bid under the Aussie Dollar.

The upside is possibly being capped by the US-China trade tensions. The US President Trump downplayed recession fears on Saturday but said that he is not ready for a trade deal with China.

Even so, the Asian stocks are reporting gains with Japan's Nikkei index currently adding 0.80%. also, the futures on the S&P 500 are adding 0.40%. Therefore, the AUD could pick up a bid during the day ahead and rise to the 21-day moving average, currently at 0.6837.

Awaiting range breakout

The pair charted a Doji candle on Aug.7 and posted gains on the following day, confirming a bullish Doji reversal. The Aussie, however, has found no love in the last six trading days and has been restricted to a narrow range of 0.6822 to 0.6735.

A break above 0.6822 would open the doors for a corrective rally to levels above 0.69. On the other hand, a range breakdown would expose the recent low of 0.6677.

Pivot levels