AUDUSD: The Aussie dollar also bore the brunt of investor concern with price action falling to support levels at 100.5 US cents. From a technical perspective we expect support levels of 100.5 US cents to hold on moderate selling through the domestic session, however the momentum is in favor of further weakness with sub-parity levels expected between now and year-end. Local economic data today includes the CBA-HIA housing affordability index, housing starts and NAB business confidence/conditions.
We expect a range for today in AUDUSD rate of 1.000 to 1.0150
We entry LONG at current market price 1.0050 ranges
Stop loss at 0.9970
Target at 1.0120 and 1.0200
EURUSD: Global markets were hit hard overnight unwinding Friday’s post-EU summit rally with market participants once again focusing on the never-ending debt crisis in Europe. The greenback was a standout performer against major peers with risk currencies falling under the weight of fears the new measure planned by EU leaders may not be enough to stave off a broader downturn.
A decidedly risk-off tone was initially triggered as ratings agency Moody’s renewed calls to review all European Union members citing a failure by EU leaders to deliver “decisive policy measures” at last week’s summit. This follows last week’s call by Standard & Poor’s to place 15 Euro-zone nations on negative watch, including that of Europe’s flagship economies Germany and France. The repercussions of which would be just another thorn in the side for global risk assets with downgrade of the Euro-Zones largest economies likely to affect the triple-A status of the European Financial Stability Facility.
We expect a range for today in EURUSD rate of 1.3100 to 1.3250 (We avoid trading the pair for now)
USDJPY: The U.S. government continued running a smaller budget deficit last month, gaining modest fiscal improvement after three straight years of shortfalls that topped $1 trillion. Two months into fiscal 2012, which began Oct. 1, the government deficit totaled $235.77 billion, which was about $55 billion lower than the deficit during the same period a year earlier.
The report was in line with expectations that the U.S. budget gap, while still very high, will shrink in coming years. The Congressional Budget Office predicts a deficit of $973 billion for 2012. The U.S. deficit in fiscal 2011 totaled $1.297 trillion, marking the third consecutive year the gap exceeded $1 trillion.
We expect a range for today in USDJPY rate of 77.50 to 78.20
Limit order to short the pair at 78.20
Stop loss at 78.50
Target at 77.80, 77.50
