USD Trading Outlook (13-03-2015)

AUD/USD The doji formed on Wednesday saw upside follow through today as Europe pushed AUD/USD just above 0.7680 into NY’s open due to broad based USD weakness. NY kept the pair bid early on and then spiked the pair up on the disappointing retail sales data. The rally touched the 10-DMA and hit a high of 0.7731. No further gains were possible though. Offers into the 0.7740/50 region loomed and the market didn’t want to push it’s luck. The USD began clawing back losses as US bond yields firmed a bit. AUD/USD slid from the high in NY’s afternoon as the USD lifted and commodities turned heavy. The pair tested intra-day support near 0.7680 and sat nearby late in the day. There is no major data due in Asia’s session so positioning might be the drive heading into the weekend. The market remains short AUD and traders may now be thinking the Fed won’t be lifting rates anytime soon as data has disappointed. The current short squeeze might persist until the Fed results are released March 18.