USD Trading Outlook (25-09-2014)

AUD/USD Early Europe saw the pair rally towards 0.8900. EUR/AUD’s slide below 1.4450 aided the lift as did a soft USD. EUR stayed heavy but the USD firmed and took over as the driver. AUD/USD slid from its high & sat near 0.8875 at NY’s open. Further USD strength helped the pair to trade briefly below 0.8850. The EUR remained heavy and drove EUR/AUD below 1.4380 which likely countered the USD strength and prevented larger losses for AUD/USD. Reports that China may change its central bank head and some dovish Fed comments allowed a bounce. The pair sat near 0.8875 late in the day. There are no major data points to impact AUD in Asia so traders will look to the RBA’s Chief Stevens speech to the Melbourne Economic Forum for some cues. If Stevens does mention AUD he’ll likely stick to the script of it being too strong. The pair then may be weighed down and we might then revisit the Sep 23 low.