USD Trading Outlook (20-02-2015)

AUD/USD The pair defied early USD strength and continued its bounce off Europe’s 0.7757 low as NY got going. The pair sat near 0.7790 in early NY and dipped briefly towards 0.7775 on the better than f/c jobless claims. The dip was bought though and the USD began to soften. This saw the pair lift to hourly resistance near 0.7815. The lift likely got a boost from AUD/NZD’s rebound from overnight and push above 1.0360 in NY. Some USD strength returned in NY’s afternoon and AUD/USD slipped back to the 0.7780 area late heading into the close. A doji formed on today’s candle and daily RSI diverged on the new s-t high. This suggests the recent short squeeze may have run its course. Yield spreads remain near recent tights and further tightening should keep the pair heavy. Daily lows near 0.7740 and 0.7720 are immediate support. Breaks of those lows should bolster bear sentiment and see the pair make a run for the 2015 low.