USD Trading Outlook (01-08-2014)

AUD/USD The combination of soft OZ data, IMF China warning and ascending US bond yields saw Europe push AUD/USD from 0.9330 to below 0.9300 into NY’s open. Yields remained firm in early NY and AUD/USD slipped further to hit a new trend low of 0.9280. No further losses were possible though after Chicago PMI missed estimates. US yields and the USD softened and NorAm equity mkts tanked. AUD/USD clawed its way up for the remainder of the session as shorts decided to cover a bit ahead of key data risk due. Late in the day AUD/USD sat just above 0.9300. The Asia session is likely impacted by China’s NBS & HSBC July Mfg PMIs. Market concerns over China growth are growing and should the data come in weak, AUD/USD is likely to break to a new low. The US jobs report is then key risk. An above f/c jobs report should send the USD broadly higher again. Key support in the 0.9185/0.9205 area then comes into play.