USD Trading Outlook (02-04-2015)

AUD/USD The pair was hit hard in Europe’s morning as the USD saw a broad based spike higher. AUD/USD dived from the 0.7635 area to a low of 0.7583 before bouncing a bit into NY’s open. The pair sat near 0.7605 as NY got going and bull pressure was applied early. The miss to March ADP jobs figures sent the USD spiraling lower. AUD/USD rallied near 0.7630 and eventually touched 0.7640. The gains eroded though even as the USD remained heavy. NZD was firm throughout NY’s session and this saw AUD/NZD briefly dip below 1.0190. AUD/USD was unable to benefit from broad USD weakness and sat near 0.7605 late in the day. OZ Feb trade balance is the main risk for AUD traders in Asia. The balance is f/c to deteriorate to AUD-1.3b from the prior AUD-980mm. A worse than f/c result should weigh on AUD/USD and the pair might test key support in the 0.7550/60 zone. A break of that support is unlikely though as the US jobs report looms and the market might not want to get overly short in case the US jobs are weak.