AUDUSD: Downbeat U.S. economic data and lower commodities and stocks weighed heavily on the Australian dollar Thursday, sending it close to key support levels.
Domestically dealers took note of a keynote speech by Australian Treasurer Wayne Swan who warned that weakening revenues mean the government will need to implement steep spending cuts to balance the budget.
Economists are divided on the outlook. While some are tipping the Reserve Bank of Australia will ease by 25 basis points others say there’s little new information since the last meeting to merit a cut.
We expect a range for today in AUDUSD rate of 1.0350 to 1.04200 (yesterday, we set to bought AUDUSD at 1.0350)
We set limit order to BUY for AUDUSD at 1.0350 (continued to hold)
Stop loss at 1.0350 (from 1.0290)
Target at 1.0410 and 1.0460
EURUSD: Euro zone bond markets Thursday received their first jolt since the Greek debt exchange was clinched earlier this month as Italian and Spanish bond yields soared with investors rushing to book profits ahead of the end of first quarter of 2012.
The sell-off in Italian debt pushed yields to their highest levels in a month, evaporating the gains made since the second of the European Central Bank’s three-year liquidity operations in February, where the ECB poured more than a half a trillion euros into the financial system. Italy had distanced itself from Spain in bond markets in recent weeks but Thursday’s rout sparked nervousness across financial markets and served a reminder that the crisis in the euro zone is far from over.
We expect a range for today in EURUSD rate of 1.3280 to 1.3380 (We expect the pair to head further North, but prefer to stay out of the market until next week.)
WE AVOID TRADING THE PAIR TODAY
USDJPY: The Federal Reserve’s latest weekly money supply report Thursday shows seasonally adjusted M1 fell by $19.6 billion to $2.208 trillion, while M2 fell $22.6 billion to $9.788 trillion.
The current and likely future path of the economy means the Federal Reserve shouldn’t provide any fresh stimulus to the economy, and monetary policy may even have to be tightened before many now expect
We expect a range for today in USDJPY rate of 81.00 TO 82.60
We set limit order to BUY at 81.00
Stop loss at 80.50
Target at 81.80 and 82.40
