USD Trading Outlook (10-11-2014)

AUD/USD Europe saw bears cover shorts after the break of 0.8550 failed to see substantial follow through. The squeeze saw the pair just below 0.8600 into NY’s open and the US jobs report. The headline miss to NFP spiked USD lower. AUD/USD hit 0.8635 in no time but the gains were quickly erased as the revisions to prior jobs data were upbeat. AUD/USD dived down to 0.8567 but broad based USD weakness stopped the slide. US bond yields were soft after the data and their slides began to deepen. AUD/USD then spent the remainder of NY’s session ascending to the post-NFP spike high. A wave of USD selling hit the market late in the afternoon. AUD/USD ran stops above 0.8640 to hit a 0.8658 high. A slight pullback had the pair just below 0.8640 late in the day. Technicals flash warnings to bears. Daily RSI diverged on the new trend low and a bullish engulfing candle formed. A bigger short squeeze may be due. If China’s econ reports (Oct trade & inflation data) due at the start of next week show topside surprises recent AUD bears may run for the exits. the l-t trend still remains lower though. Above 0.8912 may dent the l-t slide