FX News – November 21: USD Gets Boost on New Taper Talk

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The EUR/USD pair hovered at around the 1.4000 zone in today's trading as the market awaits important PMI reports coming from Europe. Yesterday, the pair dropped sharply from the 1.3540 zone to the 1.3430 area. This was fueled by rumours that the ECB is likely to implement negative deposit rates. The pair has been unable to recover since then.

Meanwhile, in the US, the minutes of the FOMC's October meeting revealed that they might finally begin the taper in the coming months. According to the minutes, they will do this if their projected improvements in the economy will happen. This helped boost the greenback, which also helped fuel the poor performance of the EUR/USD pair.

The pair fell further in value today, and is currently trading at 1.3408. Initial resistance for the EUR/USD pair is at 1.3506, followed by 1.3540. Meanwhile, initial support is at 1.3340, followed by 1.3307.

The aussie also fell against the greenback today, which was also caused by the hint of a taper that could happen in December. The AUD/USD pair has since sunk to below the 0.9300 zone in today's trading, and reached a level not seen since September. The pair continued to slide since yesterday, and was also affected by the release of the RBA meeting's minutes on Tuesday wherein it stated that the aussie continues to be 'uncomfortably high'.

The AUD/USD pair is currently trading at 0.9294, with initial resistance seen at 0.9394, followed by 0.9417. Meanwhile, initial support is at 0.9260, followed by 0.9237.

As for the USD/JPY, the pair reached a 6-month high primarily due to the Nikkei 225's bull run. This then helped the pair break past the 100.00 zone again, and is currently trading at 100.78. Initial resistance for the pair is seen at 100.11, followed by 100.36. Meanwhile, initial support is at 99.63, followed by 99.38.

By FX Strategy Team, Published on 21st of November 2013
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