AUDUSD: Australia’s banks have minimal exposure to the debt crisis that is roiling Europe and threatening major disruption to global markets.
A sweeping upturn in risk sentiment carried the Australian dollar higher in Asian trade Tuesday on hopes a new rescue package will be agreed for Europe centered on proposals to boost the existing European Financial Stability Fund.
Australia’s links to fast-growing Asian economies helped it weather the global financial crisis as the only advanced economy to dodge recession, and booming mining exports have shielded it from the worst of the recent turmoil.
We expect a range for today in AUDUSD rate of 0.9750 to 0.9950 (The pair would be a good short at 0.9980, stop loss at 1.0035, target at 0.9915, 0.9845.
Short AUDUSD at 0.9895
Stop loss at 0.9915
Target at 0.9845 and 0.9815
EURUSD: Investors continued to take heart from the fact that European leaders appear more determined to tackle the euro-zone debt crisis. Since the weekend meeting of the World Bank and International Monetary Fund, expectations have been mounting that euro-area leaders will do their utmost to contain Greece’s debt problem and increase the size of the European Financial Stability Facility.
Still, auctions by Spain and Italy, which saw decent demand, albeit at higher yields, lent support. The Spanish treasury sold EUR3.225 billion of three- and six-month treasury bills, which was about the amount it was aiming for, although at an average yield of 1.692%, compared with 1.357% at the previous auction. Meanwhile, Italy sold the maximum targeted EUR11 billion in six-month and flexible T-bills and EUR3.5 billion in the new September 2013-dated CTZ, a zero coupon note, but also at higher yields than previously.
We expect a range for today in EURUSD rate of 1.3500 to 1.3620 (We expect the pair to head further south)
Short EURUSD at 1.3570
Stop loss at 1.3630
Target at 1.3515 and 1.3480
USDJPY: The U.S. Senate could vote as soon as next week on legislation targeting China’s currency policies, as lawmakers looking ahead to next year’s elections focus on economic issues that could play well with voters.
China’s management of its exchange rate has for years been a burr in the side of lawmakers, particularly those from manufacturing states, who say an undervalued yuan benefits Chinese exporters at the expense of U.S. workers and their companies. With unemployment hovering above 9% and the economy the primary political focus of the day, critics of Beijing’s policies insist now is the time to push the issue.
We expect a range for today in USDJPY rate of 76.30 to 76.90 (We prefer to go long USD against the Yen at this levels.)
Set limit BUY order for USDJPY at 76.30
Stop loss at 75.70
Target at 76.85, 77.20
