AUDUSD: The Australian dollar was weaker late Friday as traders await the Reserve Bank of Australia’s decision on official interest rates Tuesday.
The RBA cash rate is currently 4.25% and most economists expect at least a 25 basis point rate cut tomorrow.
We expect a range for today in AUDUSD rate of 1.0400 to 1.0460
We SHORT AUDUSD at 1.0440
Stop loss at 1.0480
Target at 1.03500 and 1.0280
EURUSD: Euro-zone April manufacturing-purchasing-managers data are slated for Wednesday, providing clues about economic momentum in the area and the impact of austerity measures. A recession would worsen the ongoing sovereign-debt crisis and hurt the common currency.
The euro, which has been resilient this week even after Spain was hit by a credit downgrade, will have trouble strengthening next week. Even though the common currency strengthened this week, it is still within the broad range of $1.30 to $1.35 in which it has been trading since February.
Spain will hold its first bond auction since being downgraded two notches by Standard & Poor’s April 26. France will hold a bond auction Thursday. The results of the auctions will show how much risk investors are willing to take when they buy this debt.
We expect a range for today in EURUSD rate of 1.3180 to 1.3280
STAND ASIDE
USDJPY: Investors have spent much of the past few months wondering if the Federal Reserve will begin a new bond-buying program. To understand the odds, it helps to know what the Fed thinks happens when a program ends.
The Fed’s current program, known as Operation Twist, ends on June 30. If Fed officials were worried that the end of that program would disrupt markets or the economy, they might be more likely to launch a new one when it ends or to extend it. Increasingly, however, it looks like Fed officials aren’t too worried about the end of Operation Twist.
We expect a range for today in USDJPY rate of 80.00 to 80.70 (Note: If the pair fall below 80.00 ranges, will add additional trade.)
We BUY USDJPY at 80.30
Stop loss at 79.60
Target at 80.70-90
