FX News - May 30 2014: AUD, JPY Get Boost on Weak USD

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The AUD/USD and USD/JPY were winners in today’s Asian session, partly due to the weak greenback.

The USD fell from a seven-week high after its GDP data revealed that the US economy contracted for the first time in three years. This meant that there’s a growing possibility that the Fed would maintain low interest rates to help drive the economy.

The yen got a boost after the release of the country’s CPI and Core CPI data, which showed an increase by 3.4 per cent YoY and 3.2 per cent YoY, respectively. In contrast, the increases during the previous month were lower at 1.6 per cent (CPI) and 1.3 per cent (Core CPI). However, the increase this month was largely attributed to the rise in the country’s sales tax. This meant that without the tax increase, the actual rise would just be at 1.5 per cent for the CPI.

Despite the slightly distorted figure, the yen was able to drag down the greenback in today’s Asian session. It opened at 101.72 before dropping sharply and bottoming out at 101.51. It is making a slight recovery at the moment, just prior to the opening of the European session. It is currently trading at 101.61, with initial resistance seen at 101.85, followed by 102.10. Meanwhile, initial support is at 101.37, followed by 101.12.

Then there’s the AUD/USD pair, which finally returned to the 0.9300 area after suffering from huge losses since late last week. The bull run began yesterday with the release of the poor US GDP data, which then extended to today’s Asian session. It opened at 0.9309, and has peaked so far at 0.9329. It is currently trading at 0.9312, with initial resistance seen at 0.9363, followed by 0.9386. Meanwhile, initial support is at 0.9259, followed by 0.9236.

By FX Strategy Team, Published on 30th of May 2014
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