FX News – November 6: EUR/USD, USD/JPY Slide

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The EUR/USD pair continued its slow and steady slide early in today’s Asian trading. This is still due to the combination of yesterday’s weak data from Europe and positive ones from the US. In Europe, the EU’s PPI only grew by 0.1% in September compared to the previous month. This was lower than the expected growth of 0.2%. Meanwhile, it also shrunk by 0.9% over the past 12 months. As with the monthly figure, this was lower than analysts’ expectations, which was a contraction by only 0.7%. On the other hand, the US posted a better-than-expected ISM Non-manufacturing PMI for October. It came out at 55.4, while analysts expected it to drop from the previous 54.4 to 54.0.

The EUR/USD pair thus sunk below the 1.3450 zone late in the European trading. Although it managed to get back to the 1.3470-1.3480 range, it slid down again and is currently trading at 1.3469. Initial resistance for the pair is at 1.3497, followed by 1.3531. Meanwhile, initial support is at 1.3422, followed by 1.3388.

The USD/JPY pair fell at the beginning of today’s Asian trading after the release of the BoJ’s minutes of its October meeting. Some of the key statements in the minutes include the outlook that the Japanese economy is expected to continue its moderate recovery, and that the YoY rate of increase in the country’s CPI will likely rise gradually. In addition, the Bank decided to “continue with quantitative and qualitative monetary easing” for it to reach its stability target of 2 per cent.

After the release of the minutes, the pair fell from around the 98.53 area to 98.46. It was able to return to the 98.54 zone, but was dragged down further at 98.43. The USD/JPY pair is currently trading at 98.45, with initial resistance seen at 98.63, followed by 98.87. Meanwhile, initial support is at 98.09, followed by 97.85.

By FX Strategy Team, Published on 6th of November 2013
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