USD Trading Outlook (12-08-2014)

AUD/USD Although the market was generally subdued, AUD/USD’s downside remained in focus. The pair remained under pressure for the NY session as the USD was firm and US bond yields were up early in the day. The pair slid to a low of 0.9259 and held near that level late in the day even as US bond yields gave up their early gains. Bids touted ahead of the August 8th low aided to keep bears in check. Traders are now on the alert for data risk in the Asian session. Oz Q2 housing data (1.1% f/c vs prior 2%) and the NAB July Business Conditions (prior 2.3) & Confidence (prior 7.9) are due. Soft results should keep AUD/USD under pressure and last week’s low might be cleared. If the downside progresses the big 0.9179/0.9203 (200-DMA, 38.2 Fib of 0.8660-0.9505, May low) support zone is in play. A break of that support should see the recent slide accelerate. Wednesday’s US retail sales data might be the catalyst to do that.