FX News – May 28: USD Surges Vs. JPY, AUD & EUR

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The USD continues its surge early this week as it gained against the JPY, AUD, and EUR.

Starting with the USD/JPY, the pair soared over 101.50 after the announcement of Japan's Corporate Service Price. The data came out at -0.4%, lower than the expected -0.2%. It is yet to be determined, however, if the drop is merely a seasonal pattern. Aside from the disappointing data, the rise of the pair can be attributed to the strength of the USD.

The pair is currently trading at around 101.75-101.80, the highest it has been so far this week. Initial resistance for the pair is seen at 101.16, followed by 101.41. Meanwhile, initial support is at 100.56, followed by 100.31.

As for the AUD/USD, the pair continues its downtrend during today's Asian session, as it is currently trading at around 0.961--the lowest so far this week. Like the rise of the USD/JPY, this pair's drop is also closely connected with the strength of the USD.

The AUD may see further losses down the road as it is still considered overvalued as it has been for the longest time. In addition, HSBC recently reported a contraction in China's manufacturing activity in May--bad news for Australia, which counts China as its biggest trading partner.

Initial resistance for the AUD/USD is seen at 0.9651, followed by 0.9675. On the other hand, initial support is seen at 0.9597, followed by 0.9573.

The EUR suffered a similar fate as the AUD in today's Asian session as the EUR/USD pair currently trades around this week's low at the 1.290 level. Again, this can be attributed to the strong greenback.

Initial resistance for the EUR/USD is currently at 1.2940, followed by 1.2972. Meanwhile, initial support is seen at 1.295, followed by 1.2873.

By FX Strategy Team, Published on 28th of May 2013
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