AUDUSD: Australia’s government will report a reduction in revenue in its midyear review this week, but it remains determined to bring the budget back to surplus in 2012-2013 as previously forecast
The midyear review will contain fresh growth and inflation forecasts, setting the tone for monetary and fiscal policy in 2012. Analysts warn the government will miss its target for the next financial year because of a sharp downturn in the prospects for global growth.
We expect a range for today in AUDUSD rate of 0.9830 to 0.9900 (Last Friday, we set limit buy at 0.9660, the pair now reached above 0.9830 as results. The pair possible heading toward 0.9900)
Limit SHORT at 0.9900
Stop loss at 0.9950
Target at 0.9830, 0.9750
EURUSD: The EURO was able to resist heavy selling pressure, but there were net losses for the week and a sense that the Euro-zone crisis had reached an even more dangerous stage which increasingly undermined confidence in Euro assets.
The Euro-zone situation will remain extremely serious with a flow of funds out of peripheral economies and there will also be a growing risk of net capital flows out of the area. Even if the ECB maintains its opposition to increased peripheral bond buying and quantitative easing, there will be strong pressure for a further cut in interest rates.
There will be near-term capital repatriation by the banking sector to strengthen balance sheets which will provide some degree of Euro support, although this could prove to be increasingly fragile. There will be further speculation over a Euro break-up if Germany maintains a hard-line stance which could ironically underpin the Euro on hopes of a hard currency.
We expect a range for today in EURUSD rate of 1.3200 to 1.3390
Set Limit BUY order for EURUSD at 1.3200
Stop loss at 1.3130
Target at 1.3270, 1.3360
USDJPY: The latestUS economic data has maintained a slightly stronger tone which has continued to ease recession fears, but doubts surrounding the sustainability of demand will continue. There will be further concerns surrounding the long-term fundamentals, especially after a failure of the congressional budget super-committee.
International considerations will remain extremely important in the short-term and there will be further defensive dollar demand as global risk appetite deteriorates. There will also be the potential for capital flows out of emerging markets as dollar funding conditions tighten and these flows will continue to provide important underlying US currency support.
We expect a range for today in USDJPY rate of 77.30 to 77.90
We set to short at 77.90
Stop loss at 78.40
Target at 77.60, 77.30
