USD Trading Outlook
AUD/USD Broad based USD strength saw Europe add to losses begun in Asia. Bears pushed AUD/USD from the 0.8720 area towards 0.8610 as NY got going. An early lift towards old support/now resistance near 0.8640 was thwarted as the USD remained firm and commodities couldn't mount any comeback. AUD/USD broke below the 0.8600 barrier, ran stops and quickly hit a low of 0.8565. A lift back near 0.8600 found sellers and the pair sat just below 0.8575 late in the day. Traders now turn their focus to the Oz Oct jobs report. Should a weak result be printed it's likely further losses are due. As it stands now the technical picture is growing bearish. The pair has cleanly broken below the 38.2 Fib of 0.4775-1.1081, day /week RSIs provide bear momentum and a bearish outside candle formed today. Should the bear trend persists the May 2010 low near 0.8065 will be a major bear target.
AUD/USD Europe & NY consolidated the pair after Asia initiated short covering once the test of 0.8640 failed to break lower. The pair lingered in basically a 0.8710/50 range as the mixed econ signals from Oz and benign RBA gave no catalyst to drive the pair majorly in either direction. There is some risk of a bigger short squeeze for now. Daily and weekly RSIs haven't confirmed recent lows and today's candle shows bulls are putting up a good fight near key support. With more big data risks due traders may feel it wise to cover some shorts. Global services PMIs are released tomorrow and we get numerous Fed speakers as well. Thursday give the Oz October jobs and then Friday sees the big US NFP report. Bears will need a big upside surprise to the NFP to get the longer-term downtrend going again
AUD/USD JPY weakness in early Europe lifted AUD/JPY from the 98.30 area towards 99.10 into NY's open. AUD/USD lifted towards 0.8760 on this but bears pounced once USD strength took over the equation. USD/JPY's blast-off from the 102.85 area saw AUD/USD slip from its high & sit near 0.8720 as NY got going. The USD remained firm in early NY and AUD/USD tested near 0.8700. a bounce towards 0.8715 was erased after US ISM came in well above f/c. This sent the USD and US yields higher. AUD/USD ran stops below 0.8700 and hit a 0.8683 high. A lift back above 0.8700 ensued but bears lurked and the pair sat just above 0.8690 late in the day. Traders now look to Oz retail sales & trade data for cues. They also have to contend with the ABS' revised employment reports from Dec '13 to Sep '14 as well as the RBA meeting. The RBA is likely to stay on hold and harp on AUD strength. It's likely they maintain a policy of stable rates but if they remove that stance and lean dovish AUD should get hit. If the ABS revisions are bearish AUD likely gets hit as well and we could see 0.8640/45 break. If it breaks the May '10 low is eyed.
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