FX News – August 20: AUD/USD, USD/JPY Make Quick Jumps

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The AUD/USD made a very short run after the release of the RBA's 6 August meeting earlier today, but quickly resumed its downtrend that began yesterday.

The pair made a quick jump from 0.9102 to 0.9120 after the Reserve Bank’s minutes stated that, "regarding the communication of this decision, members agreed that the Bank should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further."

Traders took their cue from the RBA's line about 'no imminent intention to cut rates.' It's effect however, was short-lived.

In addition, the RBA said that it would, "would judge policy in months ahead on data; path of the $A would be important."

The AUD/USD pair continues its sharp slide at the moment and is currently trading at 0.9080. Initial resistance for the pair is at 0.9173, followed by 0.9195. Meanwhile, initial support is at 0.9040, followed by 0.9017.

With no crucial news coming out until Wednesday, the USD/JPY pair mostly kept the level it had late in last Friday's trading. The pair, however, made a quick rise above the 98.00 level yesterday, before sliding down again at around 3:00pm GMT. It has made a recovery at the opening of today's Asian session and is currently trading at 97.785. 

Analysts suspect yesterday's quick rise was driven mostly by traders looking for some action in the pair while waiting for the FOMC minutes that will be released tomorrow Wednesday.

In the medium-term meanwhile, traders of the yen and the greenback should keep track of the upcoming events next month as the Fed is expected to start QE tapering during the FOMC meeting on 17-18 September. Japan too will announce its decision on whether or not to pursue its plans for a consumption tax hike.

Initial resistance for the USD/JPY pair is at 97.84, followed by 98.09. Meanwhile, initial support is at 97.06, followed by 96.82.

By FX Strategy Team, Published on 20th of August 2013
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