USD Trading Outlook (10-10-2014)

AUD/USD Europe added to Asia’s gains. The pair was pushed up near the 0.8900 level as the USD and US bond yields were generally soft. The rally stalled though as the USD slide halted. AUD/USD slid from the 0.8899 high & sat near 0.8875 into NY’s open. The USD began a recovery as USD/JPY made a nice bounce off 107.50. AUD/USD steadily slid lower and paused near 0.8835. The slide accelerated and cleared the post-Oz jobs data dip after US bond yields recovered, JPY strength emerged while oil & equity markets were hit hard. The slide stalled just short of the 200-HMA as it made a NY low of 0.8765. Very little bounce was seen though and the pair sat just above the 10-DMA (0.8764) late in the day. The short squeeze may have run out of gas. After making a new s-t trend high the pair closes the day down and daily RSI rolls over. A clean break of the 10-DMA and daily lows of Oct 7 & 8 should see recent longs exit. The 2014 lows are then back in play.