USD Trading Outlook (17-06-2014)
The Australian Dollar (AUD): Size orders in the 0.9430/40 met buyers in early Europe. A sharp rise in US yield then saw AUD/USD slammed towards 0.9380. It sat nearby as NY got going. Above f/c US data and a short covering rally in EUR/AUD up near 1.4465 pushed AUD/USD to a low of 0.9372. A bounce to 0.9405 ensued as US yields gave back early gain but further gains were not to be seen. Action settled quickly & the pair sat just above 0.9400 for the remainder of NY’s afternoon. AUD longs could be getting nervous. The pair has struggled to hold ground above 0.9400 since April. Adding to bulls concerns are day/week RSIs rolling over from near o/b territory, narrowing yield spreads and new 2014 lows set for iron ore & rebar. The RBA’s Kent noted AUD he wouldn’t be surprised if AUD fell and stated he thinks it is high given the fall in commodity prices. A test of 0.9305/20 (21 & 55-DMAs, daily cloud top, June 6 low) support may be due. If it breaks it’s likely key support near 0.9200 will be tested again.
