USD Trading Outlook
• AUD impressive despite CRB collapse and brief uptick in US rates
• Carry trades back in favor as Fed not seen hurting with rates
• Follow through on rate reversal Tuesday helps on Aus side
• 200 hma support at .7638; res at 40 dma at .7737
AUD/USD Oz held on to tentative gains as bulls and contrarians try their luck on the long side after yesterday's key reversal (higher) in Australian short rates and Retail Sales beat. AUD managed to settle midrange but up on the day despite a broad USD advance led by weakness in EUR. AUDUSD needs to quickly recapture the 200 hma at .7650-60ish or risks killing any upside momentum the pair might have had. Bulls aren't risking much, most have stops under today's low at.7578.
AUD/USD opened Noram marts 1.2480, - 16 pips vs Friday's close, O/N range 1.2453/91, AUD/CAD 0.9527, +0.28%; DXY +0.11%. It was an inside day after Friday's NFP fireworks (NY range 1.2430/1.2574) and we jobbed 1.2438/83, the Loonie tracking oil higher initially. Oil futures opened firm, Brent +2.31%, WTI +2.28% and have continued with gains (+5.75% & 6.1% respectively) but the commodity bloc dislocated from oil (and gold) USD/CAD closing around 1.2465/70, regaining lost ground vs NOK and ZAR which had rallied hard in the AM along with EM currencies. EUR/USD dropped almost 60 pips from its highs and the ccys tracked that pair, rather than the fundamentals. There's some nervousness ahead of the RBA meeting tonight which dragged AUD lower.
AUD/USD Increased chatter of an RBA rate cut combined with a new iron-ore trend low to weigh AUD/USD in Europe's morning. The pair neared the 0.7550 barrier as NY got going. Early NY saw that barrier cleared as the USD was firm early on. The better than f/c US claims data then rallied the USD further. AUD/USD hit a low of 0.7534. The slide ran out of steam though as broad based USD sales (lead by EUR/USD's rally) took hold. All early NY losses were erased and the pair went on to a 0.7612 high. Some of those gains were eroded though as AUD was heavy on the crosses. EUR/AUD rallied towards 1.4395 and AUD/NZD hit a new trend low of 1.0101. This had AUD/USD slip from its session high and sit near 0.7580 late in the day. The US jobs data is now the key risk tomorrow. A better than f/c result is likely to see AUD/USD's bear trend go on to make new lows.
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