USD Trading Outlook (04-08-2014)

AUD/USD The mkt ignored the improved China PMI data and steadily slipped AUD/USD lower in Europe’s morning. Traders were anticipating a US jobs report that would ignite another rally for an already buoyant USD. Bears pushed the pair to 0.9275 just as NY got going and the pair sat just above that low into the jobs report. The disappointing jobs data sent bears scrambling to cover. AUD/USD quickly lifted above 0.9325. A slight dip met buyers as US yields plummeted. The pair then hit a session high of 0.9336. The above f/c ISM sent the pair back to 0.9300 but that slide faded. The USD couldn’t gain any traction as bond yields stayed soft. AUD/USD climbed and the pair sat near 0.9315 late in the day. S-T technicals suggest a bounce may be due. A new low was set but daily RSI diverged and a doji candle formed. Spreads narrowed a bit as well & may aid that bounce. Upcoming AU event/data risk (retail sales, jobs, RBA decision & SOMP) may elicit further short covering as the pair had a fairly significant drop in a short amount of time. Bulls need above 0.9505 to take full control of this pair.