USD Trading Outlook (18-06-2014)

AUD/USD Local bids stymied Europe’s bear run and a short covering lift took hold heading into NY’s open. The pair sat near 0.9355 as NY. the lift persisted but halted at 0.9366. Offers near the 200 hour MA (0.9373) aided in capping gains. The above f/c US CPI saw AUD react worse than most major ccys as the market is now more sensitive to being long AUD after the somewhat dovish RBA minutes. Post-CPI AUD/USD dived down to a 0.9329low. A meager bounce saw the pair briefly above 0.9340 but US yields remained firm and so was the USD. AUD/USD was heavy in the afternoon and sat just above the day’s low late in the day. Trader now look to the Fed for their next cue. Any hawkish hints from the FOMC should is likely to elicit a similar response to today’s CPI reaction. Should the post-Fed reaction be similar, AUD/USD should clear support in the 0.9305/20 zone where the 21 & 55-DMAs, daily cloud top and June 6 low sit. If cleared a retest of big support near 0.9200/10 is likely.