USD Trading Outlook (16-09-2014)

AUD/USD Early Europe saw the pair ignore the China data and rally off the 61.8 Fib of 0.8660-0.9505. The lift was aided by EUR/AUD’s fall from above 1.4715 towards 1.4300. As NY got going AUD/USD sat near 0.9015 and the lift persisted. More sales in EUR/AUD down towards 1.4295, this time by a US hedge fund, pushed AUD/USD up above 0.9030. Broad based USD weakness after the miss on US IP data combined with a US bank’s well know tech team cutting their AUD/USD short rec to push AUD/USD above Friday’s close and to a high of 0.9050. A recovery for the USD saw a dip below 0.9020 but late in the day the pair settled near 0.9035 to leave it virtually unchanged on the day. Asia now has RBA Assistant Gov. Kent’s speech and the RBA minutes to contend with. Both events are likely to mention AUD strength but may have only limited impact. The market is waiting on the Fed to see if they lean hawkish on Wednesday. The mkt seems to have built in somewhat hawkish expectations so if Yellen doesn’t deliver, AUD/USD shorts may get a nasty squeeze. Tests of res near 0.9110 and the 200-DMA may then be in order.