AUDUSD: The Australian dollar was slightly lower late Tuesday as investors held their breath ahead of the start of European trading with political upheaval and more budgetary crisis in prospect in both Italy and Greece.
Traders said the market remains nervous overall as a sovereign default in Italy would be far more serious than anything to emerge from Greece, which is a much smaller economy.
Australia also posted a narrower than expected trade surplus in September as exports weakened, but the currency markets took little notice given the global back-drop. The seasonally-adjusted trade surplus of A$2.56 billion in September, compared with a revised surplus of A$2.95 billion in August, the Australian Bureau of Statistics said Tuesday. Economists had expected a surplus of A$3.0 billion. Exports fell 3% and imports fell 1% through the month.
We expect a range for today in AUDUSD rate of 1.0340 TO 1.0420 (Minor resistance at 1.0420
Set Short at 1.0420
Stop loss at 1.0460
Target at 1.0370, 1.0320 and 1.0280
EURUSD: European Central Bank executive board member Juergen Stark called Tuesday for a fiscal as well as a financial union in Europe to put the region’s economy on a stable footing.
The euro zone’s sovereign-debt crisis has proved that fiscal policy should be rules-based, with medium-term objectives. The objectives should be credible, and the rules and sanctions should be strict and automatic.
Profligate government spending, and the resulting rise in government debt, has been partly the reason for the region’s debt crisis. Euro-zone leaders pledged at the end of June to reduce their budget deficits to sustainable levels in the coming years.
We expect a range for today in EURUSD rate of 1.3780 to 1.3870
Set Short EURUSD at 1.3850
Stop loss at 1.3880
Target at 1.3810, 1.3760 and 1.3720
USDJPY: It’s unlikely the Federal Reserve will need to provide additional stimulus to the economy now that U.S. growth rates are reviving and the labor market is undergoing a “gradual” recovery
Central bank’s decisions in August and September to ramp up stimulus efforts in the face of weakening economic growth and very high levels of unemployment. But many expect with growth still low and jobless rates high, the Fed will soon act again, most likely by increasing its balance sheet via new net purchases of Treasury and mortgage bonds. Growth expect over the second half of this year is likely to be around 2.5%, accelerating to 3% next year
We expect a range for today in USDJPY rate of 77.40 to 78.10 (We set a SELL STOP at 77.80 in the last few days, the pair hit our SELL level and current at 77.70 ranges)
SELL STOP below 77.80 (already been hit)
Stop loss at 78.10
Target at 77.40 and 77.00
