USD Trading Outlook (18-07-2014)

AUD/USD Frustrated AUD bears continued to cover some of their short positions in European and NY hours. Sales of EUR and NZD vs. AUD worked together with soft US yields to keep AUD/USD generally firm through both session. Europe pushed the pair from near 0.9360 and hit it sit just below 0.9380 into NY’s open. The soft US housing and permits data seemed to overshadow the improved claims data and had bond yields and the USD heavy. AUD/USD lifted to a 0.9392 high before it dipped to 0.9368 on the risk-off sentiment derived from the Malaysia Airline disaster. The dip faded though as US yields and the USD couldn’t manage a bounce. Late in the day AUD/USD sat just above 0.9380. Bears have some worries as the bounce off the daily cloud & 0.9320/30 support zone on July 16 saw upside follow through today and daily RSI turns up from near o/s. A test of 0.9400/10 resistance may take place in Asia if bears can’t retake control. A move above that zone may see s-t stops trigger and a test of key resistance near 0.9460 may take place.