USD Trading Outlook
The market finally settled after a wild ride yesterday morning and the AUD bear-tone which emerged immediately after the Fed has persisted through the day. I’m not really sure what the justification is but the market has this sentiment fairly deeply ingrained and doesn’t want to let go. The economic calendar is fairly light during Asian trade and it will again be flows and positional adjustment which gets the FX market moving.
Another failure to properly test .9000 psychological support led to some extended profit taking overnight, taking AUD/USD back close to .9150. Chinese CPI data due out around lunchtime could have some serious impact on the AUD, especially given that positioning is quite heavy amongst the speculative community. We are entering the traditional Northern hemisphere holiday period and positions are usually reduced during this time. USD sentiment remains bullish but with other pairs like EUR/USD and GBP/USD also close to important technical support, it’s little wonder to see some profit taking emerge from time to time.
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