USD Trading Outlook
AUD/USD Europe bounced AUD/USD off the 0.8790 area and had the pair just below 0.8820 into NY's open. Early NY saw bear pressure applied again as better than f/c jobless claims gave the USD a bid. The pair broke Europe's low but rebounded quickly as USD/JPY dived from 109.30 towards 108.50. The lift touched 0.8826 but sellers were sitting there. The slide began again as risk sentiment soured. Equity and commodity markets traded heavy for the NY session and aided AUD/USD to a new trend low of 0.8774. Only a small bounce was seen in the afternoon and the pair sat near 0.8785 late in the day. Bears have a lot of momentum on their side as day/week RSIs and narrower yield spreads weigh again. Decent support sits at the daily lows of Feb 3 & 4 at 0.8730 but that level may only temporarily slow the slide. Bears are intent on taking AUD/USD to the 2014 low at 0.8660.
AUD/USD Early Europe saw the pair rally towards 0.8900. EUR/AUD's slide below 1.4450 aided the lift as did a soft USD. EUR stayed heavy but the USD firmed and took over as the driver. AUD/USD slid from its high & sat near 0.8875 at NY's open. Further USD strength helped the pair to trade briefly below 0.8850. The EUR remained heavy and drove EUR/AUD below 1.4380 which likely countered the USD strength and prevented larger losses for AUD/USD. Reports that China may change its central bank head and some dovish Fed comments allowed a bounce. The pair sat near 0.8875 late in the day. There are no major data points to impact AUD in Asia so traders will look to the RBA's Chief Stevens speech to the Melbourne Economic Forum for some cues. If Stevens does mention AUD he'll likely stick to the script of it being too strong. The pair then may be weighed down and we might then revisit the Sep 23 low.
AUD/USD Two attempts in Europe's morning to clear the 0.8930 were made after China's PMI beat forecasts. The attempts failed though. An abatement of USD weakness and offers touted in the 0.8930/50 area capped the pair at 0.8927. The effects of China' PMI beat began wearing off and the pair slid to sit near 0.8915 at NY's open. NY applied bear pressure as commodities and commodity currencies were generally offered while the USD rebound persisted. The slide cleared the 0.8850 barrier even as US bond yields were heavy. Spec stops were run and the pair hit a new trend low of 0.8831. Very little bounce was seen & the pair sat near 0.8840 late in the day. There is no major OZ data due that would aid to stem the slide so technicals and USD interest are the likely drivers for the pair. Day/week RSIs are o/s but maintain a bear bias and the pair is pulling away from the 76.4 Fib of 0.8660-0.9505. Narrowing yield spreads are adding weight as well. The pair looks set to test levels from Feb 4 which is the date Stevens dropped the easing bias. The low that day was 0.8730. Below that targets 0.8660.
AUD/USD Europe nailed AUD/USD in their morning on a combination of effects. Concerns over China growth, soft commodities and an SMH report having Roubini Economics warning of a 20% drop for AUD saw the pair shoved down from above 0.8940 towards 0.8865 before a bounce had it near 0.8885 at NY's open. Bears pressed their case further in NY as commodities stayed heavy & global bond yields slid. NY took the pair to a new trend low of 0.8851. Bids touted at 0.8850 halted the slide and a bout of USD weakness allowed for a bounce. Late in the day the pair sat near 0.8870. The bear trend remains but the 76.4 Fib of 0.8660-0.9505 is a hurdle that needs to be overcome. A close below it will bolster a bear outlook as narrowing yield spreads and downward biased day/week RSIs currently do. A close below that Fib and a 0.8850 break likely see bear pressure increase. The 2014 low will then be bears next major target.
AUD/USD Europe rallied AUD/USD off s-t support in the 0.8925/30 area and had it near 0.8965 into NY's open. A slide in USD/JPY in early NY aided AUD/USD's further along. The pair reached 0.8995 but ran out of gas. Offers touted above 0.9000 and a recovery for the USD prevented further gains. Intra-day profit taking then took hold and the pair slide. The slide's pace accelerated and volumes increased into Europe's close as longs looking to exit on rallies came to market. A new trend low of 0.8920 was then hit. Stops below that level remained untouched. A slight bounce late in the day had the pair near 0.8930 and poised to close below the 61.8 Fib of 0.8660-0.9505. The limited bounces for this pair have those that are still long on edge. CFTC stats are only being marginally reduced. If the reduction persists the March low (0.8891) will be tested. If that level breaks there is little support until the 2014 low at 0.8660. There is no major Oz data due next week so traders will focus on Stevens' speech on Sep 25 and the US durable goods orders & GDP reports for their next cue.
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