FX News – July 10

The USD/JPY pair saw a sharp drop in today's Asian trading in anticipation of the FOMC minutes coming out at 6:00PM (GMT) today.

Having started out at around the 101.15 level, the pair dropped to as low as 100.32 today, and is currently trading at the 100.60 level. Initial support for the pair is at 101.51, followed by 101.76. Meanwhile, initial support is at 100.96, followed by 100.71.

Also in the Pacific, the AUD/USD pair recovered after yesterday's shock over economic data from China. The pair earlier returned to the 0.9200 level, and is currently trading at 0.9185. This is despite another set of negative data from China particularly in its export and import numbers, which fell way below than expected.

However, the possibility of a rate cut in August still looms as the RBA and traders await the labour market report tomorrow. If it falls to 15K and unemployment rises to 5.6% as NAB expects, then a rate cut next month may be imminent.

Initial resistance for the AUD/USD is at 0.9249, followed by 0.9272. Meanwhile, initial support is at 0.9130, followed by 0.9107.

The aussie also fared well against the euro so far today, partly due to the weak euro. The EUR/AUD pair is currently trading at 1.3915, with initial resistance seen at 1.4039, followed by 1.4074. Meanwhile, initial support is at 1.3795, followed by 1.3761.

Speaking of the weakened euro, the currency fell against the greenback after an ECB board member, Joerg Asmussen said that the ECB's move to keep the rates at current level or below it will go beyond 12 months. The ECB, however, quickly made a statement that, "no guidance was given as to the exact length of this period of time and it was not Mr Asmussen's intention to do so."

The damage had already been done, however, as the EUR/USD pair plummeted from 1.2860 to as low as 1.2770. The pair has made a slight recovery over the past few hours and is currently trading at 1.2797. Initial resistance for the pair is at 1.2840, followed by 1.2872. Meanwhile, initial support is at 1.2695, followed by 1.2663.