AUDUSD: The Australian dollar briefly fell below parity for the first time since December on Monday as financial markets continued to buzz with concern about the world economy stretching from Athens to Beijing.
The dip came despite news that China had cut its reserve ratio requirement on Saturday–a move which would normally have bolstered support for the Australian dollar. Traders said the ongoing political strife in Greece and the concern that China’s slowdown may more severe than expected are eroding support for the Aussie.
Those global concerns are mixing with sluggish activity in the domestic economy, with a decline in exports over recent months and weak business confidence keeping alive talk of further cuts in interest rates this year.
We expect a range for today in AUDUSD rate of 0.9910 to 1.0050
We set BUY for AUDUSD at 0.9930
Stop loss at 0.9860
Target at 0.9980 and 1.0030
EURUSD: New rules aimed at completing Europe’s fiscal discipline tool kit will likely be delayed after the European Parliament put off negotiations with EU member states on the proposals.
The rules, known as the “two-pack,” were proposed by the European Commission last November and seek to boost Brussels’s power to oversee member states’ fiscal policies. They include tighter coordination of budget plans and a new gauge of economic health, which would give Brussels a stronger hand in supervising a member state’s policies if that country’s financial stability were deemed at risk.
We expect a range for today in EURUSD rate of 1.2830 to 1.2930
We set BUY for EURUSD at 1.2810
Stop loss at 1.2760
Target at 1.2880 and 1.2930
USDJPY: U.S. regulators on Monday published final guidelines for banks’ internal “stress tests” of their operations, emphasizing that banks need to do so to be prepared for unexpected threats.
The regulators said that all banks, no matter their size, should have the ability to analyze “the potential impact of adverse outcomes on their financial condition.”
The regulators said the 2008 financial crisis “underscored the need for banking organizations to incorporate stress testing into their risk management practices.” The crisis demonstrated that, if banks are not prepared, they can “suffer acute threats to their financial condition and viability.”
We expect a range for today in USDJPY rate of 79.50 to 80.10
We set BUY for USDJPY at 79.50
Stop loss at 79.10
Target at 80.10 and 80.40
