USD Trading Outlook (12-02-2015)

AUD/USD The pair suffered a one-two punch during European and NY trade. Just ahead of NY’s open the Sydney Morning Herald ran a story quoting Bell Potter’s Aitken forecasting AUD/USD to hit 0.6800.The pair dropped from the 0.7770 area towards 0.7715 before bouncing near 0.7735 as NY opened. An early lift saw old support near 0.7750 tested but it turned to resistance and bears took over again. Broad based USD strength then added weight to the pair. As USD/JPY broke above 120.00, AUD/USD slid to a new low of 0.7694. Bids into hourly support near 0.7685/90 halted the slide and the pair sat near 0.7715 late in the day. Traders now turn their focus to the Oz jobs report. A weak print will likely see bears up their game. Yield spreads are then likely to narrow further and pressure AUD/USD to the downside. A retest of the 2015 low likely ensues. A break of 0.7627 then opens the door to 0.7180/0.7240 support.