USD Trading Outlook (09-12-2014)

AUD/USD Early Europe saw the pair near 0.8260 but bears were reluctant to press their luck. USD/JPY went on a slow & steady decline and that inspires some broad based USD long covering. AUD/USD lifted in Europe’s morning and tested old support/now resistance at 0.8315 before dipping below 0.8300 into NY’s open. The pair held to a tight range in NY as it oscillated in the 0.8285/0.8315 range even as the USD was generally soft for the NY session. With calls for the RBA to cut being upped (DB now expects 50bps of cuts in 2015) AUD/USD is likely to have a tough time mounting any sustained rallies. Unless Oz’s Nov employment report presents a big topside surprise to help reverse the recent spread narrowing, it’s likely bears continue to fade the rallies. Some s-t technical bounces may take hold to unwind oversold conditions but those lifts will only present opportunities for longer-term bears. Should the Oz jobs data miss to the downside the pair likely makes a quick move to sub-0.8100 levels and ultimately below 0.8000.