USD Trading Outlook
AUD/USD Europe added to the gains brought on by Oz CAPEX. Bulls managed to hit a new s-t trend high of 0.9374 but couldn't breach the TL off the April 2013 high or the high from August 6th. The headlines from the Ukraine/Russia situations hit risk hard and the USD got a safe haven bid. Most of the Oz data gains were erased as the pair hit 0.9341. Risk made a bit of a comeback though and the pair sat near 0.9355 late in the day. Recent longs may have some concerns as the pair did breach the daily cloud base and 55-DMA but couldn't hold the gains. The long-term TL is also tempering the rally. It appears as though the market needs to clear the daily cloud top and daily highs near 0.9410/15 to initiate a serious rally for this pair.
AUD/USD Commodity currencies were well bid in Europe's session and AUD/USD added to gains made during Asia's session. The pair managed to work into structural resistance and sat near 0.9340 into NY's open. US bond yields were soft in early NY and the pair's rally pushed further. Some stops were run through 0.9345 and a high of 0.9352 was made. Offers touted in the 0.9350/75 zone (daily cloud base, 55-DMA, Aug 6 high) capped gains and a broad recovery for the USD saw the pair slip just below 0.9330. Buyers were waiting though and the pair lifted back near 0.9340 late in the day. With little data due until the US jobless claims and GDP reports and global bond yields soft the AUD/USD may push higher still overnight. Daily & weekly RSI provide positive momentum and could aid further gains. A break above 0.9375/0.9400 may see bears throw in the towel and we may see the July high back in play
AUD/USD The rebound off Asia's low looked set to continue through the NY session. The o/n lift had AUD/USD near 0.9315 into NY's open. The lift persisted in early NY as the USD was generally soft and US bond yields were off their overnight highs. AUD/USD began working through offers in the 0.9325/40 structural resistance zone. It hit a high of 0.9331 but couldn't manage further gains. A recover in US yields and EUR/USD's inability to rally above 1.3220/30 got USD bulls back in the game. AUD/USD slid from the day's high into Europe's close and throughout NY's afternoon. All of the early NY gains were erased and the pair sat near 0.9305 late in the day to leave the pair nearly unchanged. Another failed attempt to break 0.9330/40 resistance may be taking its toll on recent longs. Frustration may be growing and the increased bid for the USD may see AUD longs give up the ghost. Another test of support in the 0.9230/40 zone may be in order as the recent range looks set to hold.
AUD/USD Europe saw an opportunity to sell AUD/USD after AUD/NZD put in an impressive rally overnight. They sold the pair from the 0.9324 high ad had it near 0.9315 as NY got going. NY maintained pressure as the USD firmed up in early NY after bond yields recovered some losses. AUD/USD cleared the 200-Hour MA and then matched Asia's 0.9289 low. Little bounce was seen and the pair sat near 0.9295 late in the day to leave it off 0.20% for the day. Action may be limited in the overnight session as there is little data or event risk scheduled. Traders will look to US July durable goods orders and August consumer confidence data for their next cues. From a technical point of view it appears downside risks remain. Structural resistance near 0.9330/40 is formidable, the T-L off the April 2013 high is nearby and day/week RSIs have a bearish bias. If US data leads to further USD gains, the May low and 200-DMA should come into focus.
AUD/USD shook off a new high for the move in the broader USD, holding a test of key support at .9290. Fed chair Yellen's speech offered little new news, but expectations were so high for a dovish slant that the net result ended up giving the dollar bulls another reason to press on. However, the US rate market is still willing to underprice the Fed's central tendency, not believing that rate hikes will match the rhetoric. Jackson Hole didn't change this view and this stance serves to keep the 'carry trade' intact. With the S&P within close reach of record highs the markets are displaying no fear of the Fed, all of which creates a positive backdrop for AUD. A breakout above 96.50 in AUDJPY led the way for the Oz (chart below) and gives bulls a reason to establish a foothold in other pairs. AUDUSD resistance is at the high of the week (.9345) and the 40 dma at .9356.
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