USD Trading Outlook (19-08-2014)

AUD/USD churned sideways in the NorAm session finishing unchanged on the day from Friday’s close at .9325. The pair was supported by a snappy global equity rally but capped by a continued slide in commodity prices, ending in a stalemate. Spec longs were trimmed slightly (from +33k to +29k) in the latest reporting week but hope in the carry trade lives on. US yields remained heavy as the bond market prices in a possibility that Ms Yellen presses her dovish bonafides this week at Jackson Hole and shockingly weak European data improves the chances for some form of Euro QE. Tactically, AUDUSD has traced out a fairly tight range between the 200 hma (at .9292) and last week’s high at .9335 and the Street doesn’t see much risk/reward in pushing it either way before Mr Stevens and the aforementioned Ms Yellen have their say.