USD Trading Outlook (17-10-2014)

AUD/USD AUD fell victim to the risk-off sentiment as Europe’s equity markets tanked along with commodities. AUD/USD slide from near 0.8800 towards 0.8685 before it bounced towards 0.8720 ahead of NY’s open. Risk sentiment was still soft and WTI dipped below $80/bbl. This saw early NY push AUD/USD to a new daily low of 0.8666. Buyers emerged though as US econ data was better than forecast. Hourly resistance near 0.7930 was tested. The resistance eventually broke as the Fed’s Bullard stated the Fed could contemplate increasing bond buys while also noting in a BBG interview that the Fed may want to pause taper of QE due to the drop in inflation expectations. AUD/USD rallied to 0.8789 as stocks and commodities put in powerful rallies off their lows. Late in the day the pair sat just above 0.8760 as some of those rallies were given back. No major data or events are scheduled in Asia’s session so AUD traders are likely to take their cues from the stock & commodity markets.