AUDUSD: Rising hopes that Europe’s political leaders are closer to a sweeping deal to shore up the euro zone helped risk appetite and pushed the Australian dollar higher Monday in quiet, choppy trade.
Australia’s Treasurer Wayne Swan Monday said he was hopeful euro-zone leaders would make progress toward finding a “substantial set of initiatives” to resolve the currency bloc’s sovereign debt crisis.
At 0445 GMT, the Australian dollar was at US$1.0297, up from US$1.0187 late Friday, having traded as high as US$1.034 before profit-taking sent the pair lower.
We expect a range for today in AUDUSD rate of 1.0080 to 1.0180 (Yesterday, we place a sell stop at 1.0290, the pair drop low at 1.0150. We continue to expect the pair to retreat toward 1.0080. Those who have short, trail stop loss to 1.0210 if you intend to target further
EURUSD: A meeting of euro-zone leaders on Oct. 23 is expected to spell out details of the pact.
The weekend meeting of finance ministers from the Group of 20 industrial and developing nations stoked optimism that Europe was closer to a deal which would involve higher capital levels for banks, bolstering the emergency funding mechanism and ensuring Greece continues to receive loans.
We expect a range for today in EURUSD rate of 1.3630 to 1.3750 (We also place a sell stop at 1.3850, the pair currently hit low at 1.3735, if you intend to target further, trail stop loss to 1.3765. We expect the pair to hit further south toward 1.3620 and possible 1.3450.)
USDJPY: The U.S. Treasury Department said last week it would delay sending to Congress a semiannual report on whether China and other countries are manipulating their currencies, and leadership in the House of Representatives has blocked a vote on the Senate legislation. The Obama administration is holding out hope that upcoming international meetings of the Group of 20 economic powers and the Asia-Pacific Economic Cooperation forum will yield signs of progress.
On the other hand, part of the IMF’s mission is to smooth out unhealthy imbalances in the global financial system. It’s also an institution in which China seeks to play a larger role, as the world’s No. 2 economy currently holds just a 3.81% voting share in the body, compared with the U.S.’s 16.76%.
We expect a range for today in USDJPY rate of 76.30 to 76.90 (Yesterday, we set limit buy order at 76.65, the pair drop low to 76.60 before it move back to 76.80, if you already bought trade, trail stop loss to 75.80 and target remain at 76.90, 77.20 and 77.60)
