FX News – Feb 11 2014: EUR, AUD Win VS Weak USD

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It's 'risk on' mode in Europe today ahead of Fed Chairwoman Janet Yellen's speech later (3:00PM GMT). This helped lift the EUR/USD pair near the 1.3700 again, a level not seen since late January.

The market expects the new Chairwoman to maintain the Fed's tapering despite the weaker employment data last week. However, if her tone is dovish, a further rise in the EUR/USD pair should be expected. It is currently trading at 1.3671, with initial resistance seen at 1.3670, followed by 1.3705. Meanwhile, initial support is at 1.3627, followed by 1.3593.

Earlier today, the AUD/USD pair returned to the 0.9000, which was largely influenced by Australia's mostly-positive housing data and business confidence. Although the country's home loans for December contracted by 1.9% (vs 1.8% expected), other housing data came out on a positive note. Investment lending for homes during the same month grew by 2.9%, while house price index for Q4 was also up (QoQ at 3.4%, YoY at 9.3%). Finally, NAB Business Confidence in January was at 8 compared to the previous 6, and NAB Business Conditions was at 4 compared to the previous 3.

The news from Australia, coupled with the subdued mood of the greenback, helped lift the AUD/USD to 0.9000 during the Asian session. It is currently trading at 0.9036, with initial resistance seen at 0.8955, followed by 0.8977. Meanwhile, initial support is at 0.8900, followed by 0.8878.

The currency that's been unable to make a significant surge against today's weak greenback is the British pound. So far, it has been unable to break past the 1.6430 zone today. Even if the market goes on a massive sell-off of the USD, analysts see the pair's growth to be limited at the 1.6452 area. It is currently trading at 1.6426, with initial resistance seen at 1.6441, followed by 1.6482. Meanwhile, initial support is at 1.6395, followed by 1.6354.

By FX Strategy Team, Published on 11th of February 2014
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