USD Trading Outlook
AUD/USD The pair saw a steady ascent in Europe as the USD and US bond yields were on the soft side. A rally from the 0.8685 area took hold and 0.8730 was approached. The pair then dipped towards 0.8705 into NY’s open. The dip found buyers and the ascent resumed. Buying increased as a wave of USD sales entered the market in Europe’s close. AUD/USD cleared hourly resistance near 0.8735, pierced the 21-DMA and neared 0.8745/50. Little pullback was seen as shorts may be looking to cover still with techs suggesting the squeeze has further to run. Daily RSI is biased up and the pair is holding nicely above the 10-DMA. A hold above the 21-DMA targets 0.8765/70 resistance (series of daily lows/highs, 61.8 Fib of 0.8912-0.8540). A break eyes the October high. If that’s cleared a s-t bottom might be in place.
AUD/USD Europe erased losses from Asia as the USD's rally stalled early in their morning. With AUD/USD unable to seriously test the 2014 low shorts began covering. The lift had the pair near 0.8645 as NY got going. NY pressed the rally further right out of the gate as USD/JPY's slide from it's high ran intra-day stops through 115.70. AUD/USD's ascent briefly paused at the 200-HMA and hourly resistance in the 0.8675/80 area. The lift resumed as the greenback's slide gathered pace. AUD/USD then cleared the 0.8680/90 area where the Nov 10 high, 38.2 Fib of 0.8912-0.8540 and the 10-DMA sat. The break saw stops run and the pair then tested the 0.8720/30 resistance zone late in the day. Little pullback was seen as the pair sat just below that zone late in the day. Westpac's Nov consumer confidence report & Oz Q3 wage index are due. Upbeat readings may see this lift push further. Traders then set their sights on the 0.8760/70 zone where a series of daily highs and the 61.8 Fib of 0.8912-0.8540 sit.
AUD/USD The pair held a tight 0.8660/84 range in Europe's morning with the pair spending most of that time near the upper limit. Offers in the 0.8685/00 zone adn near the 200-HMA capped the topside. A rebound for the USD saw the pair slide into NY's open and sit near 0.8665. NY added pressure immediately as the USD stayed firm and US yields staged a comeback from Friday's losses. A steady descent ensued with a brief pause at hourly support near 0.8640. The pace of the US yield lift accelerated and another leg lower for AUD/USD took hold. The slide went on to test hourly support in the 0.8605/10 area and sat within that zone late in the day. Oz Q3 house price index and NAB's Oct business confidence/conditions data are due later. Soft data will likely weigh on AUD and we might see Friday's low retested.
AUD/USD Europe saw bears cover shorts after the break of 0.8550 failed to see substantial follow through. The squeeze saw the pair just below 0.8600 into NY's open and the US jobs report. The headline miss to NFP spiked USD lower. AUD/USD hit 0.8635 in no time but the gains were quickly erased as the revisions to prior jobs data were upbeat. AUD/USD dived down to 0.8567 but broad based USD weakness stopped the slide. US bond yields were soft after the data and their slides began to deepen. AUD/USD then spent the remainder of NY's session ascending to the post-NFP spike high. A wave of USD selling hit the market late in the afternoon. AUD/USD ran stops above 0.8640 to hit a 0.8658 high. A slight pullback had the pair just below 0.8640 late in the day. Technicals flash warnings to bears. Daily RSI diverged on the new trend low and a bullish engulfing candle formed. A bigger short squeeze may be due. If China's econ reports (Oct trade & inflation data) due at the start of next week show topside surprises recent AUD bears may run for the exits. the l-t trend still remains lower though. Above 0.8912 may dent the l-t slide
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