USD Trading Outlook
AUD/USD The pair was quiet to start Europe's morning but it quickly came to life. Stops in AUD/NZD were tripped on the 1.0900 break and a large US name spiked EUR/AUD higher from the 1.4570 area up near 1.4700. This combination saw AUD/USD dive from the 0.8560 area down to 0.8480. Profit taking bids halted the slide and a softer USD then saw the pair lift a bit. NY walked in with the pair near 0.8505. Short covering remained the theme in NY as a steady ascent persisted. The rise saw the pair reach near 0.8555/60 which was the level before the AUD/NZD break. JPY weakness then saw AUD/JPY lift towards 100.70. this kept AUD/USD closer to the NY high late in the day. Aussie Q3 CAPEX is the main risk in Asia. The Reuters poll suggests a drop from Q2's result is due. A below f/c reading likely sees AUD/USD sink and retest today's low.
AUD/USD Europe smashed AUD across the board after the RBA's Lowe commented that the AUD was high and noted the RBA was in a fortunate position that it could lower rates if needed. AUD/USD dived from the 0.8610 area towards 0.8525 before bouncing near 0.8545 into Ny's open. NY applied pressure early after GDP beat estimates. 0.8514 was hit but bears ran couldn't press further as the USD's post-data gains faded. The pair rebounded above 0.8550 but sellers emerged. They're noted in the 0.8550/70 zone for now. A spike up in EUR saw EUR/AUD buyers clear the 200-DMA and touch the 1.4640/45 area. This saw AUD/USD make a trip back towards the low. Very little bounce was seen and the pair sat just above the day's low late in the day. The technical outlook grows bearish as day/week RSIs weigh, s-t T-L support is broken and the pair accelerates lower from the 38.2 Fib of 0.4775-1.1081. Loads of US data are due tomorrow. If the results show a solid US econ AUD/USD's slide will press on. Bears are targeting the May 2010 low.
AUD/USD After Asia couldn't hold AUD/USD above the 200-HMA, Europe immediately applied bear pressure. the slide accelerated as USD/JPY spiked above 118.00 and AUD/USD sat near 0.8645 as NY got going. Early NY saw bears keep the pressure on as USD/JPY stayed firm and covering by EUR shorts drove EUR/AUD towards 1.4450. Soft commodity prices had AUD longs running for the hills as well. AUD/USD erased any gains from the PBOC's action on Friday and hit a low of 0.8602. Little bounce was seen and the pair sat near 0.8610 late in the day. the pair's inability to hold above the 10 & 21-DMAs likely have recent longs concerned as that increases the bearish risks. There is no major econ data out of Asia that might affect the pair but RBA's Lowe speaks at the Australian Business Economists dinner later. We may see some dovish rhetoric or at least another effort to talk down the AUD. If that occurs a test of the TL off the Nov low and low from Nov 20 are likely.
AUD/USD initially was a major beneficiary of the PBOC's actions as it got a major boost off rallies in commodities. NY walked in with AUD/USD near 0.8700. NY made an attempt to clear Europe's 0.8723 high as the USD was soft and commodities remains firm. The attempt failed and the pair slipped as doubts about the efficacy of the PBOC action crept into the market. The pair hit 0.8700 again as JPY strength drove AUD/JPY from the 102.75 area down below 102.30. AUD/USD tested the 200-HMA and hourly support in the 0.8685/90 area. The pause there was brief though as the USD rebounded from earlier losses vs JPY. AUD/USD slipped further to trade near 0.8665. Little bounce was seen and the pair sat near 0.8670 late in the day. The pair's inability to mount bigger gains off the PBOC as well as it's failure to hold above the 10 & 21-DMAs may concern recent longs. Bears appear to be putting up a fight. Aussie Q3 Capex report is due next week. A weak result likely puts added bear pressure on AUD. We might then see a retest of the 0.8540/60 support zone.
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