USD Trading Outlook (29-07-2014)

AUD/USD The pair continued to hug the territory surrounding 0.9400 as its magnetic grip persists. Europe saw some recent shorts cover to bring the pair just above the 21-DMA (0.9400) into NY’s open. NY pushed a bit higher but couldn’t gain much traction as 0.9413 turned out to be the high. With little data to drive the pair over the next session it’s likely tight ranges will hold until major event/data risk on Wednesday (Fed, US GDP, ADP). Should that risk result in a firm USD, AUD/USD longs could be in for some pain. CFTC stats show net-long AUD positions have been building since April. Those longs have little to show for their efforts as the pair has basically ranged 0.9200-0.9500. Risks due later in the week that favor the USD may see those longs throw in the towel. We may then see a run for the exits and key supports near 0.9320 and 0.9190/0.9200 (200-DMA, May low) get tested.