Risk appetite is given a lift in early US session following better than ADP report. The report showed 42k expansion in the private job market in July versus consensus of 36k. That was the sixth consecutive monthly gain in a row even though there's no sign of acceleration in the recovery. In additional, UK's largest mortgage lender LLoyds Banking Group reported bigger than expected profits of GBP 1.6b, which boosts hope of recovery in European banking sector. Major european indices rebound strongly from intraday low while US stocks futures also point to higher opening. Aussie takes the lead in currency market by breaking through yesterday's high of 0.9148 against dollar while some strength is seen in Canadian dollar too. Yen, on the other hand, pare some of this week's gain.

Risk appetite recedes a bit earlier today on disappointing services data from Europe. UK PMI services unexpectedly dropped from 54.4 to 53.1 in July. Eurozone services PMI was also revised down from 56. to 55.8. Eurozone retail sales was flat mom in June. Australia trade surplus widened much more than expected to AUD 3.54B in June. House price index rose more than expected by 3.1%. Q/Q in Q2. Looking ahead, watch out for surprise in US ISM services.

At this point, dollar index shows no sign of stabilization yet. Intraday bias remains on the downside as long as 81.50 minor resistance holds. Further fall is still expected towards 80.04, which is close to 80 psychological level as well as 61.8% retracement at 79.73. As noted before, we still expect strong support form 80 to contain downside and bring rebound. However, the strength in EUR/USD and GBP/USD are making this view vulnerable. While we'll turn neutral in case of loss of downside momentum, we'd cautiously wait for a break of 83.45 resistance before confirming bottoming in the index.


AUD/USD Mid-Day Outlook

Daily Pivots: (S1) 0.9082; (P) 0.9115; (R1) 0.9161; More

AUD/USD rises strongly in early US session and the break of 0.91480 indicates the recent rally is still in progress. Intraday bias is back to the upside. Whole rise from 0.8066 is expected to continue towards 0.9380/9404 resistance zone. Nevertheless, we'd expect upside to be limited there to bring another fall to continue the medium term consolidation. On the downside, break of 0.9067 minor support will turn intraday bias neutral first. Though, break of 0.8904 support is still needed to be the first sign of topping. Otherwise, outlook will remain bullish.

In the bigger picture, note that a medium term top is in place at 0.9404. Price actions from there are viewed as consolidation/correction to medium term up trend from 0.6008. Such consolidation/correction will continue below 0.9404 for a while and the path could be choppy and unpredictable. Though, note that a break of 0.8315 will argue that such correction is going to extend deeper to beyond 0.8066 support, possibly to 0.7702 key support.