AUDUSD: Australian business conditions slumped to their weakest level in three years in May amid growing fears of a full scale meltdown on the euro-zone. Its business conditions index fell 6 points to minus 2 points in May from April, while business confidence fell 4 points to minus 4 points in the same period.
The rapid deterioration in confidence and conditions comes despite data last week showing Australia’s economy was the fastest growing in the developed world in the first quarter and employment growth has also been solid since the start if the year.
The data confirms the government’s 2012-13 budget on May 8 has done little to raise the expectations of the business community, and validated the RBA’s decision to lower interest rates.
We expect a range for today in AUDUSD rate of 0.9900 to 1.0000
We set limit BUY order for AUDUSD at 0.9850 (FROM 0.9820)
Stop loss at 0.9790 (FROM 0.9770)
Target at 0.9920 and 0.9960
EURUSD: Euro-zone central bank have been under increased pressure to institute euro-zone bonds or other measures that share debt and risk among member states, amid a festering sovereign debt crisis. On Saturday, Spain announced that it would seek a bailout from Europe to help its ailing banks.
Germany doesn’t categorically rule out euro-zone bonds, but insists before euro-zone countries can share the risk associated with government bonds they must create a deeper fiscal and political union to ensure there is European oversight over national fiscal policies to enforce budget discipline. Germany also rejects the idea that euro-zone bonds are a short-term solution to the crisis.
We expect a range for today in EURUSD rate of 1.2450 TO 1.2550
We set limit BUY for EURUSD at 1.2380
Stop loss at 1.2320
Target at 1.2470 and 1.2530
USDJPY: Federal tax receipts are back to their highest levels since the recession, though the government continues to pile up debt as spending outpaces revenue. The U.S. ran a deficit of $124.64 billion during May, compared with a deficit of $57.6 billion during the same period a year earlier.
The Treasury Department last month collected $180.71 billion in taxes and other revenue, the highest May tally since 2006 and the second-highest on record for the month. April tax receipts were been the highest since 2008.
We expect a range for today in USDJPY rate of 79.00 to 79.80
We set limit BUY for USDJPY at 79.10
Stop loss at 78.60
Target at 79.60 and 79.80
