AUDUSD: Another session of buoyant sentiment helped the Australian dollar higher during Asian trade Wednesday but analysts said the unit remains dictated to by global news flow, especially from Europe.
Ongoing wrangling between creditors and the Greek government over a debt restructuring and the fall out from Standard and Poor’s move to downgrade a host of euro-zone governments and entities continue to reverberate through currency markets, helping to keep the Australian dollar volatile.
Offshore the focus will be on a debt auction by Portugal and a raft of U.S. data including producer prices and industrial production while in Australia Thursday jobs numbers are due.
We expect a range for today in AUDUSD rate of 1.0320 to 1.0430 (We expect the pair to head further south toward 1.0320 ranges)
Set limit SELL STOP for AUDUSD below 1.0400 (1.0395)
Stop loss at 1.0440
Target at 1.0350 and 1.0310
EURUSD: The German government shaved its growth forecast again, reflecting a weakening European economy, but insisted Europe’s largest economy wouldn’t slip into recession. France also trimmed its growth forecast on Wednesday.
Despite weaker economic growth in Germany’s export-driven economy, domestic demand remains strong as employment is at its highest levels in a generation. The unemployment rate is expected to fall to 6.8% this year from 7.1% last year. Domestic consumption is forecast to grow 1.1% in 2012, down from 2.2% in 2011. The government forecasts slower growth in capital expenditure by businesses, predicting growth of 2% this year after 8% in 2011.
We expect a range for today in EURUSD rate of 1.2620 to 1.2800
We currently SHORT EURUSD at the current market 1.2850 ranges
Stop loss at 1.2880
Target at 1.2800 and 1.2760
USDJPY: House lawmakers approved a resolution that seeks to prevent an increase in the country’s borrowing limit in a political exercise that was designed to allow most Republicans to vote against that increase while ensuring the debt ceiling is in fact raised.
The resolution is widely expected to be defeated in the Senate next week when lawmakers there return to Washington, after which the $15.2 trillion debt ceiling would be increased to $16.4 trillion.
We expect a range for today in USDJPY rate of 76.60 to 77.20
We enter USDJPY at the current market price 76.80 (continued to hold)
Stop loss at 76.20
Target 77.20 and 77.60
