USD Trading Outlook (30-07-2014)

AUD/USD Europe walked in with the pair hovering just above the July 28 low. Light short covering brought the pair up to the 200-hour MA (0.9402) and it sat nearby as NY got going. Broad based USD strength prevailed in early NY even as US bond yields were soft. This saw AUD/USD sold-off early on and break the o/n low. The pair eventually hit a 0.9374 low as US consumer confidence aided to keep the USD firm. Very little bounce was seen and the pair sat near 0.9380 late in the day. Bears seem to be gaining an edge as frustrated longs may be heading for the exits. Day/week RSIs weigh as do narrowing yield spreads. A test of the 0.9355/60 (daily cloud top, 55-DMA) zone looks likely ahead of key event/data risk due from the US. Should these risks be favorable for the USD and lift US yields, AUD/USD should clear that s-t support zone and run for key sppt near 0.9320/30. A break of 0.9320 opens the door to 0.9190/0.9200 where the 200-DMA and May low sit.