AUDUSD: The Australian dollar traded in a narrow range Monday just a day before the Reserve Bank of Australia’s heavily watched December meeting and as a crucial European Union summit draws near.
The local currency had pushed higher earlier in the day, helped in part by moves from Italian Prime Minister Mario Monti’s government meant to balance Italy’s budget by 2013. Should developments in Europe disappoint and that region’s debt situation continues to deteriorate.
We expect a range for today in AUDUSD rate of 1.0180 to 1.0330
We Short AUDUSD at 1.0280 ranges
Stop loss at 1.0330
Target at 1.0180 AND 1.0130
EURUSD: The International Monetary Fund Monday approved an EUR2.2 billion tranche of its emergency loan program for Greece, paving the way for the debt-ridden country to avoid default.
The IMF board approval of the program allows the fund to immediately disburse financing to Athens, buying time for Europe to prevent a wider spread of the debt crisis into the rest of the euro zone.
The tranche had been delayed as Greece had failed to meet many of its basic loan program conditions and as concerns increased about the ability of the Greek government to turn its economy around. The IMF and Europe last year agreed to a joint EUR110 billion, three-year loan program. Deteriorating economic conditions and the inability of Greece to move forward with key reforms forced new financing agreements that included private-sector writedowns on their Greek debt holdings. Political turmoil and opposition in Athens threatened the agreements and both Europe and the IMF withheld the latest loan tranches.
We expect a range for today in EURUSD rate of 1.3220 to 1.3470
We set Limit BUY order at 1.3220
Stop loss at 1.3150
Target at 1.3280, 1.3350 1.3460
USDJPY: U.S. factory orders fell a second straight month during October, according to government data that suggested manufacturers were having difficulty gaining ground amid a soft economy.
Capital investment on equipment by U.S. businesses in October also fell. Non-defense capital goods orders excluding aircraft dropped by 0.8%. The category of orders serves as an indicator of the confidence businesses have in the economy.
Economic weakness is restraining manufacturers. The economy’s recovery slowed sharply early this year. Growth sped up over the summer, yet was modest.
We expect a range for today in USDJPY rate of 77.30 to 78.05
We set limit BUY order for USDJPY at 77.30
Stop loss at 76.70
Target at 77.80, 78.20
