USD Trading Outlook
AUD/USD could hardly get off the mat during European and NY hours after the disappointing jobs report. The pair drifted slightly higher from the day's 0.9259 low during Europe's morning and eventually hit 0.9283 heading into NY's afternoon. The pair slide from NY's high and sat near 0.9270 late in the day. The rise was aided by soft US yields and EUR/AUD's drop from above 1.4440 towards 1.4380 after ECB's Draghi tried to talk down EUR. The fact that AUD/USD couldn't garner further gains is a bad signs for longs. Poor price action like that suggests bears may not let the pair come up for aid while having their sights on key support near 0.9180/0.9200. Tonight's RBA SOMP may help bears in their cause. Recent AU data has been less than stellar. The report may highlight downside risks to the econ and see the RBA lean towards a dovish stance instead of their current neutral rate path. A dovish statement likely sees AUD/USD test that support down below. If it happens to break bears then turn their attention to supports near 0.9050 and 0.8890/00
AUD/USD Europe rallied the pair towards 0.9320 after Asian bids near 0.9290 stemmed the overnight slide. A dip just ahead of NY's open saw the pair back near 0.9300 but the dip was bought. The USD was generally soft and a large 0.9300 expiry aided to keep bears in check. US yields, the USD and EUR all slid lower in concert on soured risk but AUD wasn't affected. NY kept pushing the pair up and had it near 0.9330 into Europe's close. A major sell-off in the USD led by USD/JPY saw a quick spike higher. Stops above 0.9345 were run and a high of 0.9376 was hit. The USD and yields remained near the day's lows so AUD/USD only saw a slight pullback from the day's high. Late in the day it sat near 0.9355. Traders now focus on Oz jobs due later. The U. Rate is f/c to stay unchanged but the employment number is f/c at 12k vs. the prior 15.9k. Should the jobs data come in weak, AUD should turn soft as the RBA may have to alter its neutral view on rates. A bad number may see today's gains erased and put the key 0.9180/0.9205 zone back in play.
AUD/USD The post-RBA gains faded in Europe as traders focused more on China's non-mfg PMI miss and broad based USD strength. Europe slid the pair from above 0.9340 towards 0.9325 into NY's open. NY pressed the pair lower as the recent US yield slip abated and the USD remained firm. The pair got another push to the downside after US non-Mfg PMI came in well above f/c and at the highest reading since 2005. AUD/USD went on to hit a 0.9294 low. Little bounce was seen as risk sentiment was sour due to soft US equity mkts. Late in the day the pair sat just above 0.9300. There is little in the way of data to drive the pair overnight. Some impact might be felt off NZ jobs data due to AUD/NZD moves but AUD traders have most of their focus on the Oz jobs and RBA's SOMP due later this week. IF results of those events are bearish for AUD, the pair should clear last week's low. Once cleared bears target 0.9182/0.9203 where the 200-DMA, 38.2 Fib of 0.8660-0.9505 and May low sit. Day/week RSIs are biased down and won't impede bears if they decide to take the pair lower.
AUD/USD The mkt ignored the improved China PMI data and steadily slipped AUD/USD lower in Europe's morning. Traders were anticipating a US jobs report that would ignite another rally for an already buoyant USD. Bears pushed the pair to 0.9275 just as NY got going and the pair sat just above that low into the jobs report. The disappointing jobs data sent bears scrambling to cover. AUD/USD quickly lifted above 0.9325. A slight dip met buyers as US yields plummeted. The pair then hit a session high of 0.9336. The above f/c ISM sent the pair back to 0.9300 but that slide faded. The USD couldn't gain any traction as bond yields stayed soft. AUD/USD climbed and the pair sat near 0.9315 late in the day. S-T technicals suggest a bounce may be due. A new low was set but daily RSI diverged and a doji candle formed. Spreads narrowed a bit as well & may aid that bounce. Upcoming AU event/data risk (retail sales, jobs, RBA decision & SOMP) may elicit further short covering as the pair had a fairly significant drop in a short amount of time. Bulls need above 0.9505 to take full control of this pair.
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