AUDUSD: The Australian dollar slid below parity with the U.S. dollar Thursday, moving lower along with several other commodity-linked currencies on intensifying fears of euro-zone instability.
In addition to the still prevalent concerns about Europe, which had Italian bond yields rising to a euro-era high and commodities prices selling off broadly, further weighing on the Australian dollar was a sub-50 reading of the China HSBC flash PMI. That reading came in at 49.0 in December, still in the contraction zone, though it was up from November’s final 47.7.
While the Australian dollar slides, the currency is off 4% against the U.S. dollar this month, Australian companies are queuing up to hedge currency risk amid growing concern of an even sharper correction in the country’s currency.
We expect a range for today in AUDUSD rate of 0.9910 to 1.0030 (Yesterday, we closed our trade at 0.9965, we last bought at 0.9900 ranges, we expecting the pair to head further north)
If you re-entry at this level 0.9940
Stop loss at 0.9910
Target at 0.9990, 1.0030
EURUSD: Finally, U.K. Prime Minister David Cameron will talk to more European leaders in coming days to support efforts to tackle the euro-zone crisis
The euro drifted broadly sideways against the dollar as market pessimism about the euro zone capped the single currency’s gains above $1.30. A strong Spanish government bond auction helped to stabilize peripheral euro-zone bond yields and stopped the single currency from sliding too far after a four-cent drop through the week.
Better-than-expected data, which nonetheless showed a fourth straight drop in private-sector activity in the euro zone, was cited as a marginally supportive factor.
We expect a range for today in EURUSD rate of 1.2970 to 1.3130 (Yesterday, we avoid trading the pair)
Entry long EURUSD above 1.3000 ranges
Stop loss at 1.3270
Target at 1.3090, 1.3130 and 1.3230
USDJPY: The number of U.S. workers filing new applications for unemployment benefits fell to the lowest level in three-and-a-half years last week, the latest indication that a weak labor market is improving.
Some economists cautioned that unemployment claim figures tend to be particularly erratic from November to January. “Between Thanksgiving and new years we often see a large amount of seasonal volatility so it is hard for us to put to much weight behind this drop
Still, the broader trend points to steady improvement for a jobs market that has struggled to gain traction through a spotty recovery. The unemployment rate for November fell to its lowest level since March 2009, but remained historically high at 8.6%. Wages have been stagnant, and many Americans have simply dropped out of the labor pool.
We expect a range for today in USDJPY rate of 77.60 to 78.20
Limit order to BUY USDJPY at 77.45
Stop loss at 76.45
Target at 77.80 and 78.15
