AUDUSD: A rosier-than-expected employment report for June saw the Australian dollar bid higher, as dealers viewed the jobs data as a sign the country’s underlying economy remains healthy, even after a string of soft indicators.
Some 23,400 jobs were added in the month and the unemployment rate held steady at 4.9%. Economists on average had expected an unemployment rate of 4.9% in June, with the number of employed up 15,000. That number was noteworthy as it came after months of flat jobs growth and soft retail sales and house prices.
Few economists expect the strong report to speed up the prospects of a rate hike by the RBA, given the ongoing turmoil in both the global economy and markets. Front-end bond futures fell six points after the release, before trading sideways to end the day unchanged from Wednesday’s close of 95.25.
We expect a range for today in AUDUSD rate of 1.0700 to 1.0800 (At 0542 GMT, the Australian dollar was at US$1.0735, up from US$1.0699 before the jobs data and US$1.0724. However we expect a minor resistance at 1.0850 and major resistance at 1.1000. We set limit Short order for AUDUSD at 1.0850, stop loss at 1.0910, target at 1.0780 down to 1.0700)
EURUSD: The euro was broadly weaker Thursday as euro-zone debt contagion concerns resurfaced, countering any support proffered by an expected interest rate increase ahead of European Central Bank President Jean-Claude Trichet’s closely watched press conference.
Worries that the still unresolved crisis in Greece would spread to other indebted euro-zone countries pushed the single currency below $1.43. News that Spain successfully auctioned EUR1.5 billion of three-year bonds provided only limited respite for the euro.
Investors want to know whether the ECB will continue accepting Greek government bonds, even if they are considered in technical default. Standard & Poor’s said Monday that the current proposals on a second bailout package for Greece would likely amount to a selective default.
We expect a range for today in EURUSD rate of 1.4250 to 1.4430 (We done it again, we expect the pair to hit 1.4270 after the rate announce, although the pair went further south toward 1.4227 levels. We are carefully watching the pair whether it moving back toward 1.4420 levels or currently resistance at 1.4360 and possible another wave down toward 1.4180 and 1.4120. Therefore we avoid trading the pair for now.)
USDJPY: According to an aide to one of the lawmakers who attended the meeting, President Barack Obama told the participants he wouldn’t support any deal that didn’t raise the debt ceiling by enough to support federal borrowing through 2012–long enough to get past the next election.
At the meeting, three options were discussed as to how much could be agreed to in deficit reductions, ranging from $2 trillion to $4.5 trillion over the next decade
Another aide briefed on the meeting said that all the congressional Democrats were in agreement that the group should push for the largest package of savings.
No specifics of what would constitute a final deal were talked about, the aides said, speaking anonymously to reveal details of the closed-door White House meeting.
We expect a range for today in USDJPY rate of 81.00 to 81.50 (We did suggest to close the trade and book little profit along the pair, although the pair hit the stop loss and expect an uptrend toward 81.50-70 ranges)
