AUDUSD: The Australian dollar was largely unchanged Wednesday in another trading session that was dominated by news flow from Europe.
Australia’s currency has been trading above parity with the U.S. dollar for much of 2011, supported by relatively high interest rates and a mining boom fanned by China’s expanding demand for commodities like iron ore, coal and natural gas, the mainstays of Australian exports.
The Reserve Bank of Australia cut interest rates last week to 4.50% from 4.75%, its first cut since early 2009. It cited rising unemployment, a reduced inflation threat and the international backdrop as the reason for the cut
We expect a range for today in AUDUSD rate of 1.0070 TO 1.0230 (Yesterday, it our signal service, we short the pair at 1.0380 and expect the pair to drop low 1.0115-50)
Set limit BUY order at 1.0115
Stop loss at 1.0050
Target at 1.180, 1.0260, 1.0330
EURUSD: The European Central Bank should play a “central role” in resolving the euro zone’s debt crisis and use its substantial resources to build a credible firewall against the financial catastrophe engulfing its core economies
Euro zone leaders have so far failed to agree on how to build a promised EUR1 trillion stalwart that can bail out Italy and prevent contagion to the rest of Europe.
Italy, meanwhile, must move forward with its economic reforms and planned budget-tightening in order to assure markets concerned about how political turmoil in Rome could derail austerity plans.
We expect a range for today in EURUSD rate of 1.3420 to 1.3675 (Yesterday we short the pair at 1.3850, the pair reached high at 1.3852 before falling toward 1.3557 low)
Set Limit BUY order for EURUSD at 1.3420
Stop loss at 1.3370
Target at 1.3470, 1.3530 and 1.3610
USDJPY: The euro zone, the U.K. and the U.S. all have serious fiscal problems with very high public-sector debts. Without a solution to these problems, economic uncertainty, unemployment and social and political tensions may all rise, leading governments to fall.
There are already signs that the euro zone and the U.K. are in recession while the U.S. is still in a border zone. The situation in Europe is so serious that, if the countries involved are unable to integrate more effectively. Further measures are needed to stimulate euro-zone growth or else social and political instability will grow.
China, meanwhile, could face a “hard landing” in 2013 as the country’s economic model is outdated, being overly dependent on low internal consumption, high investment levels and export revenue
We expect a range for today in USDJPY rate of 77.40 to 78.10 (We continued to hold our short position)
Shorted at 77.80 (continue to hold)
Stop loss at 78.10
Target at 77.40 and 77.00
