AUDUSD: The Australian dollar pushed to its highest point in more than a month Monday, helped by progress in Europe on a plan to recapitalize the region’s banks and a strong manufacturing report in China.
Setting off the run in equities, commodities and the commodity-linked Australian dollar, euro-zone leaders neared an agreement to recapitalize the region’s banks by EUR107 billion to EUR108 billion. From there, the Australian currency got a further boost after China’s flash Manufacturing Purchasing Managers Index for October rose to 51.1, back above the 50 level that separates contraction from expansion.
We expect a range for today in AUDUSD rate of 1.0380 to 1.0510 (We expect a change of direction at 1.0500 levels)
Sell at 1.0490
Stop loss at 1.0530
Target at 1.430, 1.0380, 1.0340
EURUSD: French Prime Minister Francois Fillon said Monday real progress has been made on delivering a comprehensive solution to the euro zone’s debt crisis, which will make way for the Group of 20 advanced and emerging economies to discuss growth at a summit in Cannes early November.
Discussions have made significant progress on strengthening the capacities of the European Financial Stability Facility, the definition of a plan to strengthen the capital of European banks and the implementation of a future plan to support Greece
We expect a range for today in EURUSD rate of 1.38400 to 1.3940 (There is a minor resistance at 1.3940 ranges)
Short at 1.3920 ranges
Stop loss at 1.3970
Target at 1.3870, 1.3820
USDJPY: Right now the Fed has conditionally pledged to keep interest rates near zero until the middle of 2013, and last month it decided to sell $400 billion in short-dated bonds it holds, and to buy a like amount of long dated securities.
Officials hope extending the average maturity of the Fed’s portfolio will stimulate growth by making borrowing costs cheaper. But critics, among them central bankers, don’t think lowering the cost of credit helps much when many are trying to lower debt loads, rather than boost them.
We expect a range for today in USDJPY rate of 76.00 to 76.40 (We continued to hold our trade, since we last bought at 76.20)
We bought the pair at 76.20
Stop loss at 75.30
Target at 76.60, 76.90, 77.20
