AUDUSD: The Australian dollar was slightly lower late Tuesday after the Reserve Bank of Australia set the scene for a cut in interest rates at its next policy meeting on May 1.
In minutes of its last meeting, where rate were held steady, the RBA said the economy had slowed and should that convert into subdued inflation in the first quarter, then interest rates could be cut.
The federal government has clearly signaled that it will tighten policy in 2012-13, and state governments are also tightening spending. This may be enough to trigger one or more further cuts after May
We expect a range for today in AUDUSD rate of 1.0350 to 1.0420 (We closed out the trade at the current market price 1.0400 ranges)
We BUY AUDUSD at 1.0320 (closed out)
Stop loss at 1.0350 from 1.0290 (if you wish to hold, bring stop loss to 1.0350)
Target at 1.0450 and 1.0480
EURUSD: The International Monetary Fund Tuesday raised its outlook for global economic growth to 3.5% for the year, but warned that while prospects have improved in recent months, Europe’s debt crisis and a potential oil price spike still threaten to destroy a fragile recovery.
The euro area will need to strike a careful balance to avoid a downward spiral of austerity and recession. There are continuing concerns about the ability of Madrid to finance its debt obligations as it struggles to hit deficit targets have spiked Spain’ borrowing costs to near unsustainable levels, raising the risk of the crisis also spreading to Italy
We expect a range for today in EURUSD rate of 1.3060 to 1.3160
We set to SHORT EURUSD at 1.3160
Stop loss at 1.3220 from
Target at 1.3080 to 1.3030
USDJPY: There have been some fresh doubts surrounding the US growth rate following the latest employment data. Nevertheless, there should still be expectations of solid growth in the short-term. The Federal Reserve will keep interest rates at very low levels which will stifle yield support and there will be speculation that any evidence of weakening demand would quickly trigger a fresh round of quantitative easing.
These expectations will limit the potential for underlying dollar demand. Global growth conditions will also remain important and there will be defensive US support if fears intensify. Given the net global policy bias, the dollar should be able to avoid heavy selling pressure.
We expect a range for today in USDJPY rate of 80.50 to 81.80 (We bought USDJPY at 80.80, we now bring stop loss to entry level, the pair current sit at 81.20)
We BUY USDJPY at 80.80 ranges (continued to hold)
Stop loss at 80.80 from 80.30
Target at 81.30 and 81.70
