AUDUSD: The Australian dollar was higher late Friday, albeit well off its peak for the day after China reported weaker-than-expected first quarter economic growth. The China numbers stalled an earlier rally fueled by a change in sentiment in the markets about the prospect of a cut in interest rates at the Reserve Bank of Australia’s next policy meeting on May 1.
Strong local employment data Thursday had cooled expectations that the central bank could cut interest rates at its meeting by as much at half a percentage point, giving the Aussie dollar a boost.
China’s economy grew by 8.1% in the first quarter, marking its slowest pace in three years. The disappointing growth picture follows earlier data that showed weak exports and imports. China’s first-quarter gross domestic product growth was substantially lower than the 8.9% rise in the fourth quarter last year and the 8.3% expected by economists.
We expect a range for today in AUDUSD rate of 1.0270 to 1.0420 (Last week we sold AUDUSD at 1.0450 and reached both target at 1.0350 and 1.0320)
We BUY AUDUSD at 1.0320
Stop loss at 1.0250
Target at 1.0450 and 1.0480
EURUSD: The dollar made gains against the euro in European hours Friday, snapping a run of modest losses, after Chinese growth data disappointed and as Spanish fiscal worries gnawed away at confidence.
In Europe, doubts over Spain’s capacity to rein in its fiscal deficit remained front and centre, with the country’s stock market plumbing three-year lows, yields on benchmark 10-year Spanish government bonds edging back toward the psychologically ominous 6% level and the cost of insuring against a Spanish default rising to a new record high.
For the euro, traders held $16.6 billion in net bets that the common currency will fall. That represented 101,364 net contracts, up 26% over the week before
We expect a range for today in EURUSD rate of 1.3100 to 1.3200 (We sold EURUSD at 1.3190, with target at 1.3130 and 1.3080)
We BUY EURUSD at 1.3020
Stop loss at 1.2950
Target at 1.3130 to 1.3180
USDJPY: Traders held a net $22.6 billion in bets that the dollar will appreciate, a gain of 31% in net wagers over the previous week and the largest such position since June 2010, government data showed Friday.
Speculators trading the yen held a net $10.2 billion in bets that the currency will decline, 4% more than the previous week. That position stood at a net 66,084 contracts, marking the largest short position in the yen since July 2007.
We expect a range for today in USDJPY rate of 80.50 to 81.80
We BUY USDJPY at 80.80 ranges
Stop loss at 80.30
Target at 81.30 and 81.70
