USD Trading Outlook (23-09-2014)

AUD/USD Europe nailed AUD/USD in their morning on a combination of effects. Concerns over China growth, soft commodities and an SMH report having Roubini Economics warning of a 20% drop for AUD saw the pair shoved down from above 0.8940 towards 0.8865 before a bounce had it near 0.8885 at NY’s open. Bears pressed their case further in NY as commodities stayed heavy & global bond yields slid. NY took the pair to a new trend low of 0.8851. Bids touted at 0.8850 halted the slide and a bout of USD weakness allowed for a bounce. Late in the day the pair sat near 0.8870. The bear trend remains but the 76.4 Fib of 0.8660-0.9505 is a hurdle that needs to be overcome. A close below it will bolster a bear outlook as narrowing yield spreads and downward biased day/week RSIs currently do. A close below that Fib and a 0.8850 break likely see bear pressure increase. The 2014 low will then be bears next major target.