FX News – Jan 24 2014: AUD Falls Under 0.87 After RBA Statement

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Reserve Bank of Australia (RBA) board member Heather Ridout said earlier today that the aussie "hasn't fallen far enough." According to her, the fair value should be at USD0.80.

The statement caused the AUD/USD pair to crash further, which led to the continued decline of the pair's value over the past two weeks. From trading just under the 0.8750 late in yesterday's session, it has since fallen to under the 0.8700 area.

In addition the Ms Ridout's statement, trouble with China's ICBC bank could lead to an even weaker aussie.

The AUD/USD pair is currently trading at 0.8708, with initial resistance seen at 0.8810, followed by 0.8833. Meanwhile, initial support is at 0.8683, followed by 0.8662.

The story is different with the USD/JPY pair, as the stronger yen led the pair to lose 150 pips in yesterday's session. Although it made a recovery late yesterday, the weakness continued to persist today, as it still trades at around the 103.00 area.

The weakness of the greenback may be attributed to the weaker-than-expected housing data released by the US yesterday. For example, Existing Home Sales in December came out only at 4.87 million, which was lower than the expected growth by 4.94 million. The Housing Price Index was also lower at 0.1% versus the projection of a 0.4% growth.

The USD/JPY is currently trading at 103.30, with initial resistance seen at 104.02, followed by 104.28. Meanwhile, initial support is at 102.13, followed by 101.87.

As for the EUR/USD, the pair continued with its rise to the 1.3700 level after briefly going on a shallow dip in today's Asian session. While the weakened greenback is part of the reason of the pair's rise, it may also be attributed to the growing preference for the euro as traders anticipate the European Union's recovery.

The pair is currently trading at 1.3700, with initial resistance seen at 1.3782, followed by 1.3817. Meanwhile, initial support is at 1.3613, followed by 1.3579.

By FX Strategy Team, Published on 24th of January 2014
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