The AUD fell to the 0.951 level against the USD in today's Asian trading after the release of the Reserve Banks' Minutes of the Monetary Policy Meeting.
The RBA hinted at further cuts in the future, stating that: "inflation outlook as currently assessed might provide some scope for further easing, should that be required to support demand."
It added that while the aussie was noticeably lower, it remains high relative to export prices. There were also indications on the possibility of the currency's further slide along with the drop in the terms of trade.
The AUD/USD pair is currently trading just above the 0.950 level. Initial resistance is seen at 0.9594, followed by 0.9618. Meanwhile, initial support is seen at 0.9459, followed by 0.9435.
As for the EUR/USD, the pair has dropped to around 1.3355 in today's Asian trading after starting out strongly at around the 1.3370 mark.
Initial resistance for the pair is seen at 1.3407, followed by 1.3441. On the other hand, initial resistance is at 1.3342, followed by 1.3309
The EUR also gained against the JPY in yesterday's trading, a rally which has continued so far in the Asian session. The EUR/JPY pair is currently trading at the 126.55 level. Initial resistance for the pair is seen at 127.30, followed by 127.62. Initial support, meanwhile, is at 125.98, followed by 125.66.
Volatility Expected on Wednesday's FOMC
The biggest news this week comes from the US with its FOMC report. Volatility is to be expected in today's trading as well as tomorrow as the market focuses on Wednesday's Fed Economic Outlook. While some analysts expect tapering from the Fed, there has been no definite indicator so far as to where the fx market would head around the time of the report. A report from FT.com, for example, said that Ben Bernanke is expected to deliver a positive message on the US economy, which could be used as a justification for quantitative easing. But again, we will never know for sure until he makes the announcement.
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