USD Trading Outlook (20-10-2014)

AUD/USD Europe played both sides of the 200-HMA in their morning. a late morning push off improved risk sentiment had it near 0.8790 into NY’s open. News that the PBOC will inject 200bln Yuan of 3-mo loans to 5 or 6 Chinese banks put a bid into AUD/ AUD/USD spiked up to a 0.8812 high. The gains were fleeting though and the spike quickly reversed. The USD was firm as US bond yields rallied. this aided to reverse the gains. The USD lift persisted and AUD/USD slid back below the 200-HMA to hit a NY low of 0.8745. Action then settled quickly as the market licked its wounds from action earlier in the week. Late in the day the pair lifted a bit and sat near 0.8760. Traders may see the recent 0.8640/0.8900 range extremes get tested next week. Australia see the RBA minutes and Q3 CPI while China gives us Q3 GDP and Oct HSBC Flash Mfg-PMI. Should the econ data come in weak, AUD/USD is likely to test the 2014 low again. A break of that low puts the May 2010 low near 0.8065 in play.