AUDUSD: The Australian dollar slid in Asian trading Tuesday as markets registered increasing disappointment with the results of last week’s European Union summit.
Weighing on investor sentiment, ratings firms sharply criticized the results of the summit, adding to the skepticism that the accord struck by European leaders was enough to contain the euro zone sovereign debt crisis. Fitch Ratings predicted a “significant” economic downturn in Europe and said the crisis was likely to continue throughout 2012, while Moody’s Investors Service said the crisis remains in a “critical and volatile stage.”
We expect a range for today in AUDUSD rate of 0.9970 to 1.0090 (Yesterday, we long the pair at 1.0050, the pair reached high at 1.0157 before knock back to 1.000 ranges)
We entry long again at 1.0000
Stop loss at 0.9930
Target at 1.0060, 1.0130
EURUSD: Germany rejects raising the EUR500 billion lending limit for the planned European Stability Mechanism, or ESM, Chancellor Angela Merkel told a meeting of her ruling party Tuesday, underscoring a rift at a recent European Union summit over the capacity of the euro zone’s debt crisis firewall.
Countering fears that Germany’s overall contribution to euro-zone rescues may rise further, Merkel stressed during a meeting with lawmakers of the Christian Democrats that a planned increase of funds to the International Monetary Fund by Germany’s Bundesbank was independent of government commitments to the ESM, a coalition official present at the meeting said.
We expect a range for today in EURUSD rate of 1.2970 to 1.3130 (Yesterday, we avoid trading the pair)
We entry long EURUSD at 1.3030 ranges
Stop loss at 1.3270
Target at 1.3090, 1.3130 and 1.3230
USDJPY: The Federal Open Market Committee, the policy-setting arm of the Federal Reserve Board, left its policy options open for 2012 but took no actions Tuesday and offered an assessment of the economy that was guardedly more upbeat, but still marked by “significant downside risks.”
Nine out of 10 Fed officials voted to keep the central bank’s easy-credit policies unchanged for the second meeting in a row in what was the last Federal Open Market Committee meeting of the year. It took place on Fed Chairman Ben Bernanke’s 58th birthday.
Officials reiterated that short-term interest rates are likely to stay close to zero until mid-2013 at least. In their assessment of the economy, they said indicators pointed to some improvement in the U.S. jobs market.
We expect a range for today in USDJPY rate of 77.60 to 78.20
Limit order to short the pair at 78.20
Stop loss at 78.50
Target at 77.80, 77.50
