USD Trading Outlook
AUD/USD short covering was the there for Europe & NY. Once AUD/JPY's slide abated Europe lifted AUD/USD off the 0.8065/70 area and had it at the 200-HMA into NY's open. NY kept the squeeze going after retail sales was well below estimates. AUD/USD spiked up to 0.8180. The lift was aided by JPY weakness that allowed AUD/JPY to recover losses and near the 95.55/60 area, AUD/USD did slip late in NY as USD strength emerged. The pair sat near 0.8140 late in the day. Traders new look to the Dec Oz jobs report later. The employment data is forecast to deteriorate. A reading below estimates should increase thoughts an RBA cut is due. AUD/USD should then trade heave and we may see a retest of the 2015 low in the near future.
AUD/USD The NY session saw the pair hold a relatively tight range above the 200-HMA. The pair was basically directionless between 0.8130 and 0.8170 as it was buffeted by a falling AUD/JPY and USD/JPY. The upcoming Oz jobs report on Jan 15 (Oz time) is another likely factor keeping AUD traders from being overly aggressive. The pair is likely to remain in tight ranges until that data point comes out unless there is major external factor to drive it in either direction. As it stands now the pair is being supported by the 10 & 21-DMAs and RSIs are biased up while yield spreads widen a bit. The risk for a squeeze exists. If the Oz jobs data is very upbeat we may get that squeeze and see the pair test key resistance near 0.8370/0.8400.
AUD/USD the 200-HMA turned into support overnight as Europe bought the dip down to the average. The pair rallied & sat just above 0.8140 into NY's open and into the jobs report. Whippy price action ensued post-data release but bulls eventually reigned as the market focused on the miss to average hourly earnings. this saw US yields and the USD sink. AUD/USD spiked higher. The lift got a boost from AUD/NZD breaking above 1.0435/40 resistance and a well followed US bank's tech team establishing a long AUD/USD position. The pair pierced 0.8200 and little pullback was seen as the pair held near the session's high late in the day. Key s-t resistance in the 0.8215/20 area is now under threat and may break soon. RSIs are now biased up and yield spreads have begun widening. A break of that zone likely sees more short covering and the ensuing squeeze could potentially reach 0.8375/0.8400 resistance.
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