JPY Trading Outlook (03-06-2014)

AUD/USD The pair was unable to recover from the post-Oz building’s data slide. Europe tried to break 0.9240 early in their session but were unable to. A bounce had AUD/USD near 0.9260 as NY got going. Firm US yields kept the USD bid and bears pressured AUD/USD to a new low of 0.9235. The initial ISM report allowed for a small bounce but the corrected data had the USD firm again and the pair sat just above 0.9240 late in the afternoon. The downside looks vulnerable again as the weekly cloud caps, day/week RSIs are biased down, the pair has fallen back into the daily cloud and yield spreads narrow. Big even risk from Oz may increase the bear risks. Oz retail sales are due later but the big event is the RBA. No change in rates i expected but the mkt may look for Stevens pressure AUD as it remains near recent highs against many ccys and iron ore prices continue to trade heavy. The 0.9200/10 area remains support but if broken, the 200-DMA & daily cloud base (0.9175/80) are initial support. Beyond that 0.9120/40 (March 25 low, 100-DMA, mid-March highs) is targeted. A break there opens the door to 0.8985/00.