USD Trading Outlook (27-10-2014)

AUD/USD Short covering persisted in Europe’s morning after the break of s-t trend-line support during Asia saw limited follow through. Europe lifted AUD/USD from 0.8750 & had it near 0.8780 as NY got going. AUD buying remained the theme in NY as risk was generally buoyant and AUD crosses remained bid. AUD/JPY lifted from 94.75 towards 95.25 while EUR/AUD slide from the 1.4420 area down near 1.4365. This allowed AUD/USD to rally from NY’s open to a high of 0.8824. A brief bout of road based USD buying dipped AUD/USD back near 0.8795 but the pair regained its composure. It bounced and sat just above 0.8810 late in the day. The broad 0.8640-0.8900 range remains intact as does the l-t bear trend but some squeeze risk is extant. The pair has recently been trading within a symmetrical triangle. The bottom was pierced in Asia but it was a false break. Now the pair looks poised to make a break of the triangle top. If that occurs recent shorts may cover and a 0.8900 test may be due. Should 0.8900 break a bigger squeeze may be due as it indicates s-t bottom may be in place.