The first tentative technical cracks of the bearish trend are starting to be observed, as buy-side flows have resulted in the breakout of a short-term descending trendline. A retest of the area of resistance at 0.7115–20 would allow for the market to transition into a range from 0.7060–65 up to 0.7115–25. As the correlations stand, the weakness in the Australian-US bond yield spread, alongside the bullish momentum in the US Dollar, should keep supply pockets fairly strong as the pair correct higher. The recovery in the S&P 500 in the last 24h has arguably assisted the rebound off lows, but with domestic factors (yield spread) playing a more important role for the Aussie, and as the correlation coefficients suggest, it’s the yield spread and the DXY+Yuan we must pay special attention to.