USD Trading Outlook
AUD/USD Europe applied bear pressure to the pair as the chances of RBA rate cuts were upped in the rates markets. Aiding to weigh on AUD/USD was EUR/AUD being well bid. The pair sat near 0.7800 as NY got going. Early action saw the pair consolidate losses but bears took control again when it became clear the pair couldn't regain ground above 0.7800, EUR/AUD pressed on to the 1.4630 area and commodities got hit again. AUD/USD made a quick dive and took out bid into 0.775. A low of 0.7720 was hit. Bids into 0.7700 (barrier likely) and the abating of the USD's rise saw a profit taking bounce ensue. Late in the day the pair sat just below 0.7760. No major Oz data is due so traders are likely to key on the EZ CPI and US GDP reports for the pair's cues. Strong US GDP should see additional bear pressure applied to the pair and we might see 0.7700 (July 2009 low) break.
AUD/USD O/n carry-over highs from a weak USD following Tues's weak Durables report was followed by selling in early London and a second small slide after the Fed statement kept the patient tightening scenario intact. AUD/USD fell to 0.7900 during the Asian morning session when the MAS surprised by lowering the slope of its NEER, which was viewed as a form of easing. It rallied when Aus CPI was released and showed underlying inflation was a bit hotter than expected. The IOS was pricing in a 40% chance of a RBA easing next week before the AUD CPI and below 10% in the aftermath of the release. Another tumble in commodity prices, particularly oil, after US storage levels exploded for a second week in a row, isn't helping commodity ccys amid relentless drops in industrial metals and coal prices and another drop in China's growth target to 7% and chatter about yuan weakness. This week's o/s bounce has run out of gas before even threatening a close above the Dec 23 high & daily pivot pt at 0.8056. Bids by 0.7900 hold so far in the FOMC aftermath.
AUD/USD wasn't able to make much bullish headway in NY's session even as the USD tumbled against most other major currencies. The pair got only a small boost off the below forecast durable goods orders as it traded to a 0.7975 high. A upbeat US consumer confidence number helped turn the USD's fortunes and AUD/USD began steadily declining. Fears over a below forecast Aussie CPI due later likely tempered any bullish thoughts for the pair as well. The pair's slide tested near Europe's low and it sat just above 0.7925 late in the day. Should Oz CPI come in below f/c, calls for an RBA rate cut will be upped. Bear pressure will then be applied to AUD/USD and we might see the pair go on to break the 2015 low and test support near 0.7700.
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