USD Trading Outlook
AUD/USD The combination of soft OZ data, IMF China warning and ascending US bond yields saw Europe push AUD/USD from 0.9330 to below 0.9300 into NY's open. Yields remained firm in early NY and AUD/USD slipped further to hit a new trend low of 0.9280. No further losses were possible though after Chicago PMI missed estimates. US yields and the USD softened and NorAm equity mkts tanked. AUD/USD clawed its way up for the remainder of the session as shorts decided to cover a bit ahead of key data risk due. Late in the day AUD/USD sat just above 0.9300. The Asia session is likely impacted by China's NBS & HSBC July Mfg PMIs. Market concerns over China growth are growing and should the data come in weak, AUD/USD is likely to break to a new low. The US jobs report is then key risk. An above f/c jobs report should send the USD broadly higher again. Key support in the 0.9185/0.9205 area then comes into play.
AUD/USD Bears gently persuaded AUD/USD lower in their session as the USD was generally firm. They pushed form 0.9390 and had it near 0.9365 as NY got going. ADP missed estimates and allowed a small bounce for the pair but it was quickly wiped out after GDP saw a big upside surprise. US bond yield and the USD were solid and remained so into Europe's close. AUD/USD dropped post-GDP and hit 0.9309 before a small bounce had it near 0.9320 into the Fed. Post-Fed saw a knee-jerk spike down as algo grabbed onto the Fed's notes on inflation. A new trend low of 0.9301 was hit but the pair reversed as notes to the Fed remaining accommodative inspired USD bulls to take some profit. AUD/USD lifted to 0.9355 but slipped again late in the day and sat just above 0.9320. Aussie building permits for June are due later and might impact the pair slightly but traders turn most of their focus to more US data tomorrow & Friday. Jobless claims and July PMI are due Thur & NFP is Fri. If those results are solid USD bulls will strike again. AUD/USD's slide then likely deepens and 0.9185/0.9200 is eyed.
AUD/USD Europe walked in with the pair hovering just above the July 28 low. Light short covering brought the pair up to the 200-hour MA (0.9402) and it sat nearby as NY got going. Broad based USD strength prevailed in early NY even as US bond yields were soft. This saw AUD/USD sold-off early on and break the o/n low. The pair eventually hit a 0.9374 low as US consumer confidence aided to keep the USD firm. Very little bounce was seen and the pair sat near 0.9380 late in the day. Bears seem to be gaining an edge as frustrated longs may be heading for the exits. Day/week RSIs weigh as do narrowing yield spreads. A test of the 0.9355/60 (daily cloud top, 55-DMA) zone looks likely ahead of key event/data risk due from the US. Should these risks be favorable for the USD and lift US yields, AUD/USD should clear that s-t support zone and run for key sppt near 0.9320/30. A break of 0.9320 opens the door to 0.9190/0.9200 where the 200-DMA and May low sit.
AUD/USD The pair continued to hug the territory surrounding 0.9400 as its magnetic grip persists. Europe saw some recent shorts cover to bring the pair just above the 21-DMA (0.9400) into NY's open. NY pushed a bit higher but couldn't gain much traction as 0.9413 turned out to be the high. With little data to drive the pair over the next session it's likely tight ranges will hold until major event/data risk on Wednesday (Fed, US GDP, ADP). Should that risk result in a firm USD, AUD/USD longs could be in for some pain. CFTC stats show net-long AUD positions have been building since April. Those longs have little to show for their efforts as the pair has basically ranged 0.9200-0.9500. Risks due later in the week that favor the USD may see those longs throw in the towel. We may then see a run for the exits and key supports near 0.9320 and 0.9190/0.9200 (200-DMA, May low) get tested.
AUD/USD Numerous rallies in Europe & NY off the 0.9400 support area stalled near 0.9420/25 resistance. The pair's inability to crack 0.9480/00 and TL resistance off the Oct high earlier in the week had recent bulls frustrated and looking for the exits. NY initially pushed the pair up from the 0.9400 area as June durable goods data beat but May's data saw a big downward revision. The 0.9420 level was breached but the lift faltered again. Risk sentiment was sour as the Ukraine/Russia situation shows no signs of abating. Bonds, USD & JPY were firm while equities were soft for the entire NY session. AUD/USD made a steady descent from the NY high and eventually made a new session low of 0.9393. Bids near the 200-HMA and ahead of the July 23 low slowed bears. Little bounce was seen though as geopolitical risks remains and next week sees a slew of risk that may propel the USD higher. Should next week’s event/data risks be USD positive, AUD/USD is likely to retest the key 0.9320/30 zone. If broken the 200-DMA and May's low come into play.
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