FX News – July 31: Aussie Continues Slide, USD/JPY Stays at 98.0

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The aussie continued its slide today against the greenback where it fell to the 0.90 level. This happened after RBA Governor Glenn Stevens said that a weaker aussie would be better for the Australian economy and gave hints about further cuts in cash rates. Aside from the Governor's statement, the AUD has also been severely affected by the weak Chinese economy and talks of QE tapering from the US Federal Reserve.

NAB reported that the RBA will cut the cash rate twice before the end of the year. The first one is expected next week during the RBA's August announcement. This will be followed by another rate cut by November or earlier. These cuts could bring cash rates to 2.25%.

The AUD/USD pair is currently trading at 0.9035, with initial resistance at 0.9137, followed by 0.9160. Meanwhile, initial support is at 0.8968, followed by 0.8945.

The EUR/AUD pair, on the other hand, continued yesterday's rally and has peaked so far at 1.4713. Analysts do not see this rally stopping at the moment, but it's still important to look into reports coming in from the EU in the early part of the European trading. CPI data and Unemployment Rate for June will be announced at 9:00AM GMT.

Yesterday, the pair reached a 3-year high after breaking the 1.4475 level. It is currently trading at 1.4678. Initial resistance for the EUR/AUD is at 1.4774, followed by 1.4811. Meanwhile, initial support is at 1.4516, followed by 1.4480.

In the case of the USD/JPY, the pair has remained fairly flat throughout the week so far. It has hovered around the 98.00 level since Monday, and analysts see the pair staying at that level while waiting for the US GDP data that will be announced later today (12:30PM GMT).

The USD/JPY pair is currently trading at 98.08, with initial resistance seen at 98.62, followed by 98.87. Initial support, on the other hand, is at 97.89, followed by 97.65.

By FX Strategy Team, Published on 31st of July 2013
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