AUDUSD: The Australian dollar sunk to a near 13-month low on Tuesday as the country’s central bank raised the prospect of an interest rate cut in the coming months.
Also weighing on the commodity-linked currency were still heightened fears of a Greek default, looming global economic slump and more stock market declines in both the U.S. and Asia. In just a month, these concerns and weaker commodity prices have dragged the Australian dollar down more than 10% after the currency had hit a three-decade high against the U.S. dollar earlier in the year.
Still, the big news in Australia was an afternoon statement from the Reserve Bank of Australia, or RBA, that its cash rate target would remain at 4.75%, but that there was an improving outlook for inflation. Traders said the statement hinted that the bank had lowered its inflation outlook after previous rhetoric from the RBA warned that an ongoing mining boom raised the prospect of inflation moving above its target band.
We expect a range for today in AUDUSD rate of 0.9510 to 0.9630 (Yesterday we set price to entry at 0.9380, the pair drop low at 0.9395, we missed out a big rise today. We expect the pair to be reach around 0.9630 and 0.9700 next week.)
Set limig BUY order for AUDUSD at 0.9510
Stop loss at 0.9450
Target at 0.9560, 0.9630 and 0.9700
EURUSD: European stocks closed markedly lower Tuesday on heightened fears that Greece’s debt problems will trigger a funding crisis for the banking system, which in turn could lead to a global double-dip recession.
Banks, basic resources, autos and construction stocks–which are all sensitive to the economy–led the declines in Europe, while Dexia fell during the session by 37% as the bank admitted that its business faces structural problems and signaled that it could be broken up. The slide in Dexia’s share price follows a 10% drop Monday after ratings company Moody’s Investors Service said it was reviewing the bank for a possible downgrade because of problems it may have getting funding in difficult markets.
Concerns deepened after euro-zone finance ministers said they were delaying a decision on whether Greece would be receiving the next tranche of its bailout funds.
We expect a range for today in EURUSD rate of 1.3270 to 1.3410.
Limit BUY order for EURUSD at 1.3270
Stop loss at 1.3200
Target at 1.3330, 1.3410 and 1.3500
USDJPY: The U.S. federal deficit in fiscal year 2012 would be about one-third lower if the economy were operating at its full potential. The official budget score-keeper said the deficit would only be about 4% of gross domestic product, instead of CBO’s 6.2% projection for 2012, if the economy was not under-utilizing capital and labor resources
If the economy were stronger, incomes would be higher, sending more tax revenue to the government and unemployment would be lower, reducing the cost of some government benefits, CBO said in its letter. These “cyclical factors” contributed about $340 billion to the roughly $973 billion deficit projected for 2012.
We expect a range for today in USDJPY rate of 76.50 to 77.20 (The pair reached our first target at 76.90, the highest was 76.96. We continued to hold our trade and will close out at 77.20-77.60 ranges)
Entry at market price for USDJPY at 76.60 ranges
Stop loss at 76.10
Target at 76.90, 77.20, 77.60 AND possible heading to 80.00
