USD Trading Outlook
The Australian Dollar (AUD): AUD/USD was posting a loss directly on the release of the Chinese data that came in the form of the Manufacturing PMI for the month of April came at 50.4 vs 50.5 expected, however returned back within a blink of an eye and is overall unchanged at 0.9285. The currency rose as high as US93.04¢ in late morning trade on Thursday after China’s official purchasing managers’ index inched higher to 50.4 in April. It was fetching US92.93¢ in afternoon trade. Expectations had been that the measure of manufacturing activity would rise to 50.5, but the slightly lower than expected outcome also didn’t point to a deepening slowdown.
The Australian Dollar (AUD): The ADP had little effect but US GDP miss put broad pressure on the USD. The AUD rallied above 0.9290 but the much better than f/c Chicago PMI and persistent firmness in EUR/AUD saw hourly support near 0.9250/55 tested.
The Australian Dollar (AUD): A test of 0.9205/25 support failed overnight, bears started to worry and took some early profits. Europe session came in, saw this as an opportunity and lifted the pair to near 0.9260-70 area. However, no further gains were seen as bears jumped in again and AUD/JPY was unable to break above the 200 HMA. With no data due from Oz, the market looks to the EZ CPI, FOMC and China PMI data.
The Australian Dollar (AUD): The pair rallied to a high of 0.9318 in early Europe session but stalled as offers into the 200-HMA & 21-DMA. AUD slid to 0.9275, start of NY session, EUR/AUD recovery and a better than f/c U.S pending home sales added pressure to AUD to a low of 0.9243. Little bounce was seen as heavy commodity & stocks weighed on risk. Late in the session the pair sat near 0.9255, further downside could be seen as event risk looms.
EUR/USD Tight ranges held in NY as action early in the session saw the day's range basically matched. NY traded 1.3830-1.3847 with the it settling near 1.3840 to end the week. Second tier US data wasn't able to stir the market. April's Markit Composite Flash came in at 54.9 vs. the prior 55.7 with the employment component coming in at its lowest since June 2012. Ongoing Russia/Ukraine tensions and a looming Ukrainian ultimatum for Russia due tomorrow kept traders from pushing the pair too far. Market focus seems tied to April 30 when big econ & event risk is due. German jobs & EZ CPI for April as well as the FOMC are scheduled for Tuesday. The CPI is likely to get most attention and send EUR lower. Market sentiment will grow that the ECB will have to act soon if inflation is slipping. A soft CPI may mean an end to EUR/USD's rally and see the pair break below the 21 week MA and T-L off July's low which have been supporting dips. A clean break below that support and the April low may see the pair make a run for the 2014 low near 1.3480.
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