USD Trading Outlook (19-03-2015)

AUD/USD Shorts decided it would be best to cover in NY’s morning as positioning was stretched and the Fed risk loomed. AUD/USD sat near 0.7610 into NY’s open and bull pressure was applied right out of the gate. Broad based USD weakness aided the pair’s lift from the open up to 0.7675 ahead of the fed. A slight dip to the 200-HMA (0.7653) just before the announcement was bought and the pair sat near 0.7670. The Fed’s dovish lean intensified the short covering as US yields collapsed and reversed spread narrowing seen earlier in the day. AUD/USD pierced the 21-DMA and hit a high of 0.7752. Very little pullback was seen and the pair sat near 0.7740 late in the day. Longer-term shorts have some concerns now. A bullish outside candle formed today, daily RSI is biased up and yield spreads are widening. With the market still very short a squeeze to the 0.7900/30 resistance zone cannot be ruled out.