FX News – July 16: AUD Recovers, EUR/USD Stays Flat

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The AUD/USD pair has made a slight recovery in today's Asian trading after the release of the RBA minutes which was less dovish than expected. 

According to the minutes:

"Given the exchange rate adjustment that was occurring, and with the substantial degree of monetary stimulus already in place, members assessed the current stance of policy to be appropriate for the time being. The Board also judged that the inflation outlook, although slightly higher because of the exchange rate depreciation, could still provide some scope for further easing, should that be required to support demand."

Because of this, analysts have revised their earlier predictions that a rate cut would occur in August.

The pair has traded at around the 0.9020-0.9120 levels over the past few days, but has sunk to a low of 0.9047 at the end of yesterday's trading. It has since climbed back up again, and is currently trading at the 0.9103 level. Initial resistance for the pair is seen at 0.9155, followed by 0.9178. On the other hand, initial support is at 0.9068, followed by 0.9045.

The aussie also gained against the euro as the EUR/AUD fell from 1.4335 to 1.4250 earlier in today's trading. This is also brought about by the just-released minutes of the RBA meeting. The pair has made a slight recovery though, as it is currently trading at the 1.4278 level.

Initial resistance for the pair is at 1.4391, followed by 1.4426. Meanwhile, initial support is at 1.4277, followed by 1.4241.

Looking at the EUR/USD, the pair has remained fairly flat this week so far, despite a temporary dip in yesterday's trading. It has hovered around the 1.3060-1.3070 levels, before dipping to below 1.3010 after Fitch Ratings downgraded the European Financial Stability Facility (EFSF) rating from AA+ to AAA, although it left the outlook at 'stable'.

The EUR/USD is currently trading at around 1.3070, with initial resistance seen at 1.3072, followed by 1.3105. On the other hand, initial support is at 1.2984, followed by 1.2952.

By FX Strategy Team, Published on 16th of July 2013
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