FX News – November 5: Aussie Regains 0.9500 after RBA Statement

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Earlier today, the Governor of the Reserve Bank of Australia (RBA) said in a statement that the cash rates would remain unchanged at 2.5 per cent. However, the takeaway in the statement for most traders was Mr Stevens’ mention of the aussie being ‘still uncomfortably high’. This is a marked difference from what the RBA Governor said in previous statements which had a softer tone.

Today’s statement led a significant drop in the value of the AUD/USD pair. It slid below the 0.9470 area a couple of hours after Mr Stevens’ statement. Despite this, however, the pair managed to regain much of today’s losses as it managed to climb beyond the 0.9500 zone at the moment. The AUD/USD pair is currently trading at 0.9515, with initial resistance seen at 0.9554, followed by 0.9577. Meanwhile, initial support is at 0.9476, followed by 0.9453.

The euro, meanwhile, went on a downtrend against the greenback early in today’s trading ahead of the monetary policy meeting later this week. This led the EUR/USD pair to drop below the 1.3485 zone a few hours ago.

As we mentioned yesterday, more volatility can be expected from the pair as the dates of the ECB announcement and the release of the US NFP data near.

However, similar to what happened to the aussie and greenback, the pair managed to make a comeback at the 1.3500. It has since dropped below that level again and is currently trading at 1.3493. Initial resistance for the pair is currently at 1.3564, followed by 1.3598. Meanwhile, initial support is at 1.3480, followed by 1.3447.

The sterling, on the other hand, enjoyed a boost after the release of the Marikit Services PMI. It came out at 62.5, which came out better than analysts’ expectations of 59.8.

The news caused the EUR/GBP pair to collapse from 0.8450 to 0.8410 in today’s session. It is currently trading at 0.8403, with initial resistance seen at 0.8471, followed by 0.8492. Meanwhile, initial support is at 0.8443, followed by 0.8422.

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