USD Trading Outlook
AUD/USD The pair defied narrowing yield spreads in Europe and the pair's post-CAPEX bounce set a new s-t trend high. The pair hit a high of 0.7914 which the bear flag top. The pair began sliding as the USD put in a solid rally. NY walked in with the pair near 0.7890. The USD's lift got a boost after durable goods results were solid. US bond yields lifted and took the USD with them. AUD/USD's slide intensified and ran s-t stops through 0.7835/40. The drop persisted through NY's session and late in the day the pair was threatening to close below the 21-DMA. Bear signals are upped after daily RSI diverged on the new s-t high and a bearish engulfing candle formed. A test of key support near 0.7720/40 looks likely. A break there puts the 2015 low in play. Another round of solid data from the US tomorrow might see that support cleared.
AUD/USD NY walked in with AUD/USD near the lower end of Europe's range. Early action saw the pair rise from the 0.7870 area and test towards 0.7890. AUD/NZD then rallied up to the 1.0475/80 zone to give AUD/USD an added boost. THe pair hit a 0.7903 high and saw little pullback as it sat just above 0.7895 late in the day.Oz Q4 CAPEX is the big risk in Asia. The Reuters poll sees a decline of 1.9% vs. the prior +0.20% result. With the market still positioned short AUD an above f/c result is likely to see AUD/USD rally further. We might then see 0.8000/30 tested where the 55-DMA and Jan 28 high sit.
AUD/USD The key 0.7720/40 support zone was neared in Europe's morning but couldn't be taken out. The ensuing short covering bounce saw the pair lift near 0.7770 ahead of Yellen's testimony. The initial USD rally after Yellen's comments were released saw the support zone tested again but once again it held. The quick reversal in the USD's gains saw the pair spike back above the 10 & 21-DMAs and approach 0.7830. The pair dipped back near 0.7800 but lifted again as AUD/NZD broke above 1.0430 resistance and eventually trade to 1.0471. AUD/USD's lift saw the pair just below the 0.7830 level in NY's afternoon. Traders now look to China's Feb HSBC Mfg PMI for cues. Should the result come in above the 49.5 forecast (prv 49.8) we might see offers in the 0.7850/60 zone tested again. IF they get filled and 0.7880 breaks we'll likely see a decent sized short squeeze. The pair then might make a run to 0.8000/30 resistance.
AUD/USD Both Europe & NY made attempts to break below the 200-HMA but failed the resulting bounces were limited though. AUD/USD's bounce off the MA could only reach s-t hourly resistance near 0.7815. The bounces were likely limited due to generally heavy commodity prices and AUD/NZD's slip towards 1.0355. NY's afternoon saw the pair a bit heavy and sit near 0.7800 into the close. Traders aren't getting overly aggressive as they await Fe Chief Yellen's testimony to congress tomorrow. Should she lean hawkish and have a June hike feasible, AUD/USD should slide. key supports near 0.7740 & 0.7720 might then get tested. A break below 0.7720 likely means the recent squeeze is through and a retest of the 2015 low might ensue.
AUD/USD A heavy USD and sales in EUR/AUD down to the 1.4390 area had AUD/USD just below 0.7850 into NY's open. Bulls couldn't make a serious run at offers in the 0.7850/60 zone and the pair began slipping. The slide accelerated as risk sold-off, option related selling took hold and EUR/AUD rallied back above 1.4520. AUD/USD's dip hit 0.7811 before buyers emerged. The positive risk sentiment brought on by the Greek headlines then saw the pair approach the day's high again. AUD/JPY's rally back above 93.30 helped the lift. late in the day the pair sat just below the session high. With the pair seemingly correlated to general risk sentiment it's likely traders will cue off the Greek headlines over the weekend for direction. A positive outcome should see the pair make further gains. Outside of the Greek drama the Oz Q4 CAPEX report will be the next big risk for traders.
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