AUDUSD: The Australian dollar slumped back below parity with its U.S. counterpart Thursday on news that Chinese manufacturing activity slowed in September, deepening already significant concerns about the world’s economic growth outlook.
The China report followed a move by the International Monetary Fund this week to downgrade forecasts for world growth and moves Wednesday by the U.S. Federal Reserve to try to lower borrowing costs in the moribund U.S. economy.
We expect a range for today in AUDUSD rate of 97.00 to 0.9880 (We expect to see the pair to reach its parity next week.)
We avoid trading the pair today, the best possible price to entry the pair at 0.9700
Stop loss at 0.9630
Target at 0.9880, 0.9960 and 1.0050
EURUSD: World finance officials are facing up to a burgeoning global crisis with a fewer options for responding, top international leaders warned Thursday, urging Europe to act swiftly to address the region’s woes to avoid contagion spreading to the global economy.
The leaders of the U.K., Australia, Canada, Indonesia, Mexico and South Korea, in a joint letter, said euro-zone leaders must look at “all possible options” to ensure long-term stability in the world’s second-largest international currency. The countries said the lack of visible political will over the summer, and the failure to find a lasting solution to sovereign debt problems, had damaged confidence and held back the global recovery.
We expect a range for today in EURUSD rate of 1.3370 to 1.3580 (We expect the pair to head north, currently the pair on its recovery heavily loss.)
Best entry price at 1.3400
Stop loss at 1.3330
Target at 1.3580, 1.3650
USDJPY: The U.S. Federal Reserve’s balance sheet shrank a bit last week, just as central bank policymakers said they would boost the share of long-term Treasurys in another bid to spur the economy.
The Fed’s asset holdings in the week ended Sept. 21 stood at $2.861 trillion, down from the $2.867 trillion reported a week earlier, the Fed said in a weekly report Thursday. The central bank’s holdings of U.S. Treasury securities edged up to $1.663 trillion Wednesday, from $1.659 trillion the week before. However, its holdings of mortgage-backed securities and federal agency debt securities decreased.
The Fed’s portfolio has more than doubled since the financial crisis of 2008 and 2009 as the central bank bought mortgage and government bonds to keep interest rates very low and stimulate the economy.
Despite efforts to speed up its recovery, the economy has slowed sharply this year, with unemployment high and consumer spending weak. This week, the Fed announced it would increase its share of longer-term Treasurys by $400 billion by June 2012 in an effort to make credit cheaper and push up spending and investment.
We expect a range for today in USDJPY rate of 75.90 to 76.60 (The pair expects to have a minor support at 75.90 areas. Yesterday the pair reached high 76.93, hit our first target at 76.85 before heading down. We booked out profit yesterday.)
If you consider re-entry the pair at the current market price 76.20 ranges
Stop loss at 75.50
Target at 76.60, 76.90 and 77.20
