USD Trading Outlook (11-12-2014)

AUD/USD A tight range held in Europe after the bounce post-China CPI. The pair traded in the 0.8310/40 range and sat near the upper limit heading into NY’s open. Early NY saw the pair push a bit high as the USD was generally soft. The pair hit 0.8348 but the NY gains began to erode. Sour risk sentiment emerged and JPY strength came along with it. AUD/JPY dropped from the 99.45 area and pierced 98.00. This dragged AUD/USD from NY’s high down to intra-day support in the 0.8280/90 area. The pair held near that support late in the day as the market now awaits the Oz jobs data. A weak result likely gets bears encouraged again as calls for RBA rates cut are likely to be upped. Soft Oz jobs should see yield spreads narrow further to add weight to AUD/USD. A retest of the 0.8200/20 support should then take hold.