AUDUSD: Renewed worries about Europe’s ability to handle its debt crisis pushed the Australian dollar lower Tuesday.
Only days after newly-formed governments in Italy and Greece helped risk-sensitive assets like the Australian dollar gain steadily, worries about whether these new governments can implement effective austerity measures reversed much of the gains on Tuesday. One of the factors was a disappointing auction of Italian debt that weighed on equities across the globe.
Helping the Australian dollar from falling further, the Reserve Bank of Australia said its decision to cut interest rates at the start of November reflected a desire for a more neutral monetary policy, but the bank signaled that the effect of an ongoing mining boom still posed the risk of needing to have interest rates back at a more restrictive level.
We expect a range for today in AUDUSD rate of 1.0130 TO 1.0230.
Set Limit BUY order for AUDUSD at 1.0100 ranges
Stop loss at 1.0040
Target at 1.0170, 1.0230
EURUSD: The Eurozone debt saga is going through a quiet phase as Italy’s next intended Prime Minister, Mario Monti, works on the task of building a new government and Greece’s technocratic government settles in.
However, confidence continues to take some shots from the Greek opposition party, as its leader Samaras said that he would not agree to any new austerity measures or sign any binding agreements demanded by the EU. This statement underlines the importance of the new Greek leadership succeeding; the failure of this latest incarnation of government would almost certainly lead to even deeper political unrest, with the future of Greece and thereby the Eurozone being placed in jeopardy.
We expect a range for today in EURUSD rate of 1.3490 to 1.3650
Set Long for EURUSD above 1.3490 ranges
Stop loss at 1.3430
Target at 1.3550, 1.3650
USDJPY: Top corporate executives and U.S. policy makers struck a pessimistic tone over the prospect that global leaders will overcome persistent economic headwinds, instead finding few silver linings for the world economy.
Participants in The Wall Street Journal’s CEO Council expressed little hope Tuesday that the supercommittee of lawmakers attempting to cut the U.S. deficit would be able to reach a meaningful compromise ahead of a Nov. 23 deadline.
We expect a range for today in USDJPY rate of 76.80 to 77.70 (We continued to hold our trade where we bought last 77.15)
Long USDJPY at 77.15 (already bought)
Stop loss at 76.50
Target at 77.70, 78.30
