FX News - July 2: Focus on the AUD/USD & EUR/USD

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AUD/USD: RBA Maintains Rates

The aussie fell against the greenback today after the Reserve Bank announced that it will hold rates at 2.75%. Around the time of the announcement, the AUD/USD pair was trading at around the 0.9220 level, but slid down to about 0.9170 a couple of hours after the governor’s statement. The pair has somehow recovered over the past hour, which is now trading at the 0.9190 level.

In today's statement, RBA Governor Glenn Stevens said that although the aussie has depreciated by 10% since April, the value of the currency, "remains at a high level." He added that, "[it] is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy."

The RBA last announced a 25bps cut in May, which sent the aussie plummeting to its current level. Analysts expect another 25bps cut within the year, which could send the cash rate to a new record low of 2.5%.

Initial resistance for the AUD/USD is seen at 0.9317, followed by 0.9341. Meanwhile, initial support is at 0.9175, followed by 0.9153.

EUR/USD: On the Rise Again

On the EUR/USD pair, on the other hand is making a steady rise so far this week. The pair currently hovers between the 1.3055-1.3075 levels, showing signs of recovery after dropping sharply to the 1.3000 level at the end of the trading week last week.

Traders will focus on the European Central Bank's interest rate decision on Thursday (11:45am, GMT), particularly the press conference that will follow (12:00pm GMT).

Initial resistance for the EUR/USD is at 1.3100, followed by 1.3133. Meanwhile, initial support for the pair is at 1.3034, followed by 1.3001.

For more fx news, please check out our fx trading tips section.

By FX Strategy Team, Published on 2nd of July 2013
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