FX News – July 5: EUR/USD, GBP/USD Fall, AUD/USD Recovers

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The EUR/USD fell slightly at the end of Thursday's trading after the International Monetary Fund (IMF) cut its growth forecast for Italy. After initially trading at around the 1.3000-1.3200 levels, the pair fell to 1.2885 after the IMF's announcement.

However, the EUR/USD is expected to hover at around 1.2900 as traders await nonfarm payrolls and unemployment data from the United States later today. Should the US report positive numbers, the greenback would likely rise and consequently we would see a drop in the euro.

Yesterday, ECB president Mario Draghi announced that it would keep interest rates, "at present or lower levels for an extended period of time." In other words, the interest rate may remain at 0.5% or the ECB could also cut it further in the foreseeable future.

The pair is currently trading at 1.2890, with initial resistance seen at 1.3077, followed by 1.3110. Meanwhile, initial support is at 1.2966, followed by 1.2934.

The GBP/USD pair also fell yesterday after the new BoE governor Mark Carney's dovish statement during the press conference. This was further aggravated by the falling euro, which sent the pair to its lowest level in 5 weeks. The pair is currently trading at the 1.5050 level, a slight recovery after dropping to as low as 1.5030. Initial resistance for the pair is seen at 1.5381, followed by 1.5419. Meanwhile, initial support is at 1.5205, followed by 1.5167.

As for the AUD/USD, the pair has recovered slightly after a significant drop in yesterday's session, falling to around the 0.9050 level. It has risen steadily over the past few hours and is currently trading at 0.9140. Volatility should be expected around the time of the announcement of the US NFP and unemployment data. Initial resistance for the pair is seen at 0.9149, followed by 0.9163, while initial support is at 0.8984, followed by 0.8962.

By FX Strategy Team, Published on 5th of July 2013
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