USD Trading Outlook
AUD/USD The pair gave back the post-Lowe comments gains but held above the post-Oz GDP low in Europe as AUD/NZD's rally negated USD strength. The pair sat near 0.7810 as NY got going. The USD's rally turned out to be too powerful to ignore in NY. The broad based rally saw AUD/USD finally give in and stops through 0.7790/95 were run. There was no looking back for the pair and the slide approached key support near 0.7740/50. Little bounce was seen and the pair lingered near the day's low late in the session. The pair may get some impact from the AiG Feb PCI but it's likely to be limited as the market awaits the US jobs data. A solid jobs report should see 0.7740 break and stops run. Bears then set their sights on the bear flag base followed by the 2015 low.
AUD/USD Early NY saw gains in Europe added to. The ADP miss put the USD off balance at first as yields softened. AUD/USD ran stops above 0.7850 but could only manage a new high of 0.7860. USD strength, lead by EUR/USD sales, quickly emerged. AUD/USD slid from the high. The drop got a boost from a report in 'The Australian' noting that Rio Tinto will be might cut 1,000 jobs. http://bit.ly/1GTxEM3 AUD/USD dived towards the post-Oz GDP low but could only touch 0.7803. Very little bounce was seen though as AUD/NZD traded to a new trend low of 1.0296. AUD/USD sat just below 0.7815 late in the day. Oz retail sales and trade data for January are the key risks in Asia. Soft reading might see the recent short squeeze run out of steam. We might then see key support near 0.7720/40 tested.
AUD/USD NY erased Europe's post-RBA profit taking slide. Upon the open NY lifted the pair off the 0.7800 region as falling US yields brought on broad based USD weakness. The lift managed to match the post-RBA spike high. No further gains were possible though. Offers in the 0.7850/60 zone loomed and an afternoon rebound prevented further gain. The upcoming Oz Q4 GDP risk also likely helped keep the rally in check. Late in the day the pair sat near 0.7830 which left it with impressive gains and the best performing currency vs. the USD. The AiG PSI is another data risk ahead of GDP. Should both result come in above f/c we might see shorts squeezed further. We might then see the Feb 26 high and bear flag top near 0.7614/18 get tested.
AUD/USD A tight range held for the pair in Europe & NY. AUD/USD held close to the day's lows and was unable to take back much of the post-China RRR cut losses. Bear signs are upped ahead of the RBA. A bearish outside candle formed, price is back below the 10 & 21-DMAs, daily RSI is biased down and yield spreads hold at recent tights. Traders await the RBA and chance of a cut are slightly above 50%. If no cut is made traders expect Stevens to at least initiate an easing bias. Should they cut and take an easy bias AUD bears will charge. The pair should easily take out key support near 0.7720/40 and make a run at the bear channel base and 2015 low.
AUD/USD Europe pressed res near 0.7835/40 just ahead of NY's open. Once it couldn't be broken some profit taking took hold. That slide gather pace after US Q4 GDP was a bit above forecast. The USD put in a broad based rally and AUD/USD suffered a bit. Support in the 0.7790/95 area was approached but couldn't be seriously tested. US yield and the USD dived after the Chicago PMI missed big. AUD/USD retested the day's high but failed to clear the resistance once again. Late in the day the pair was hugging the 200-HMA. Next week is a big week for AUD. China's Feb NBS Mfg PMI kicks things off on Saturday. Forecasts call for 489.7 (prv 49.8). Aussie data sees Feb AiG PMI & Jan HIA new home sales early in the week with the big Q4 GDP and Jan retail sales data later in the week. Data might play second fiddle though as the mkt focuses on the RBA. There is a 50% chance of a cut and more traders are leaning that way after the weak CAPEX. With US rates basically stagnant and not helping AUD/USD lower, the RBA may feel it's their duty to take action in getting AUD down. A rate cut will see AUD/USD bears charge and the 2015 low retested.
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