AUDUSD: The Australian dollar maintained a strong tone during the first half of the week and advanced to 2012 highs against theUS currency with a peak in the 1.07 area. There was a general improvement in risk appetite which helped underpin the currency and the Australian currency gained support on yield grounds, especially after the more dovish Federal Reserve stance.
Traders felt more optimistic about the Australian, increasing their bets in favor of those currencies by 31% for Australia. The Australian dollar will continue to be subjected to high volatility and it will be difficult to advance much further even with solid yield support
We expect a range for today in AUDUSD rate of 1.0580 to 1.0680
Set to short AUDUSD at 1.0670
Stop loss at 1.0730
Target at 1.0580 and 1.0550
EURUSD: Speculators, rejecting European leaders’ assurances that they are close to a framework for solving the euro zone’s sovereign-debt problems, piled into pessimistic wagers that the euro will lose value, setting a new record as of Jan. 24, government data showed Friday.
This week the euro has gained against the dollar, opening at $1.28 and trading as high as $1.32 Friday. Market-watchers have described the common currency’s upward move as short-covering, when traders who have sold shares short then buy shares to fulfill the transaction. But the increase in net short positions contradicts this thesis, suggesting that investors continue to wager against the euro.
We expect a range for today in EURUSD rate of 1.3040 to 1.3160 (Last week we shorted the pair at 1.3160, the pair drop low to 1.3069 before it crawling back)
We set to short EURUSD at 1.3280
Stop loss at 1.3340
Target at 1.3220 AND 1.3180
USDJPY: There will be expectations of solid US growth which will provide some support to capital inflows. The Federal Reserve policies will also be a very important influence and the expected commitment to lower interest rates for an even longer period, coupled with the possibility of further quantitative easing, will undermine yield support and lessen dollar support.
On the other hand, There will be further concerns surrounding the industrial and trade outlook, especially with Japan registering an annual trade deficit for the first time in 16 years. There will be pressure for the Bank of Japan to boost competitiveness through a weaker currency and there will also be fears surrounding the huge debt burden.
We expect a range for today in USDJPY rate of 76.50 to 77.20 (Last week we short the pair at 77.70 with target at 77.10, then went long at 77.00 with stop loss at 76.50
Long USDJPY at 77.00 ranges (continued to hold)
Stop loss at 76.50
Target 77.40 and 77.70
