USD Trading Outlook
AUD/USD The pair rallied in Europe as EUR/AUD sales from model accounts gave AUD a bid. AUD/USD rallied near 0.8800 before pulling back towards 0.8780 into NY's open. Early NY saw risk get a solid boost of Caterpillar's earning beat and upped forward guidance. AUD/USD followed risk higher and hit a 0.8807 high. The gains faded quickly though as US bond yields and the USD went bid after the US econ data. AUD/USD steadily slid lower, pierced the 200-HMA and hit a NY low of 0.8752. Very little bounce was seen and the pair sat near the low late in the day. There is no major data from Oz until next week so price action for AUD/USD is likely dictated to by the crosses and external factors. NZ September trade data is the risk Asian traders will look at as it may have some impact on AUD/NZD.
AUD/USD The pair held to a tight but choppy range (0.8766/0.8816) for the NY session. NY walked in with the pair sitting just above 0.8800. An early bout of USD strength brought on by the above f/c headline CPI number had AUD/USD slip to the low of the range. The dip was bought though as AUD buys in the crosses ensued. EUR/AUD's break below 1.4430 support towards 1.4365 and AUD/JPY rally above 94.50 aided to push AUD/USD to the day's high of 0.8816. Risk soured in NY's afternoon as stocks turned heavy. JPY caught a bid and AUD/JPY slid towards 94.00. AUD/USD was dragged lower. Late in the day AUD/USD sat just below 0.8785. A speech by the RBA's Stevens, NAB Q3 Business Confidence and China's Oct HSBC mfg PMI are the risks for the Asia session. Stevens is likely to harp on AUD strength so he'll likely have little impact. IF the data points are soft AUD/USD likely slides lower and a test of s-t support near 0.8735 might ensue.
AUD/USD An bout of JPY strength in early NY saw AUD/USD slip from just above 0.7880, pierce the 200-hour MA and touch a NY low of 0.8758. The dip reversed though as broad USD softness trumped JPY strength. The pair began climbing off the low and took out the overnight highs. A session high of 0.8798 was eventually hit as the USD stayed heavy and risk sentiment was buoyed by rising equity markets. Very little pullback from the high was seen and the pair sat just above 0.8795 late in the day. Traders now turn their attention to the RBA minutes and China econ data. The RBA is likely to harp on AUD strength but this may see only limited pressure applied to AUD as the market is used to hearing that rhetoric from the RBA. The China data is likely to have a bigger impact. Q3 GDP is f/s to slip to 7.2% from 7.5% while Sep retail sales are f/c at 11.8% vs. the prior 11.9%. Should the data see a downside miss AUD should turn heavy. Today's gains might then be erased and sub-0.8700 levels may be tested ahead of AU Q3 CPI due on Oct 24.
AUD/USD Europe played both sides of the 200-HMA in their morning. a late morning push off improved risk sentiment had it near 0.8790 into NY's open. News that the PBOC will inject 200bln Yuan of 3-mo loans to 5 or 6 Chinese banks put a bid into AUD/ AUD/USD spiked up to a 0.8812 high. The gains were fleeting though and the spike quickly reversed. The USD was firm as US bond yields rallied. this aided to reverse the gains. The USD lift persisted and AUD/USD slid back below the 200-HMA to hit a NY low of 0.8745. Action then settled quickly as the market licked its wounds from action earlier in the week. Late in the day the pair lifted a bit and sat near 0.8760. Traders may see the recent 0.8640/0.8900 range extremes get tested next week. Australia see the RBA minutes and Q3 CPI while China gives us Q3 GDP and Oct HSBC Flash Mfg-PMI. Should the econ data come in weak, AUD/USD is likely to test the 2014 low again. A break of that low puts the May 2010 low near 0.8065 in play.
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