FX News – September 5: Beige Book Drags Down USD; Upcoming Interest Rate Decisions

FX Strategy Articles > FX Trading Tips

The release of the Fed's Beige Book yesterday showed only moderate improvement in the country's economy in July and August, giving way to an uptrend in the EUR/USD pair.

The highest gains were seen in automobile sales and of housing-related goods, while employment was more or less at the same level as the last reporting period. Prices, meanwhile, remained subdued with price increases minimal.

The survey is based on data gathered by officials at the Fed's 12 regional banks. This is prepared two weeks prior to the Fed's policy meeting, the next of which will happen on 17-18 September.

The EUR/USD pair broke through the 1.3200 mark yesterday after the release of the survey, and went up to as much as a little above 1.3215. It has been pulled back below the 1.3200 level during the opening of the Asian session, however, and is currently trading at 1.3197.

Initial resistance for the pair is at 1.3185, followed by 1.3217. Meanwhile, initial support is at 1.3124, followed by 1.3092.

The AUD/USD pair has hovered between the 0.9160 and 0.9180 zones as traders await Australia's trade data (1:30AM GMT), particularly the trade balance, as well as its export and import data.

The pair is currently trading at 0.9171, with initial resistance seen at 0.9120, followed by 0.9142. Meanwhile, initial support is at 0.9017, followed by 0.8995.

After Australia's trade data, the next big event will happen at 3:00AM GMT with Japan's interest rate decision. The Bank of Japan is expected to maintain interest rates and continue with its policy of purchasing JGBs and other assets, despite the fact that the country is showing signs of recovery. This could sustain the weakness of the yen in the long term.

The USD/JPY stayed flat at the opening of today's session at around the 99.70 level. The pair is currently trading at 99.72, with initial resistance seen at 100.08, followed by 100.33. Meanwhile, initial support is at 99.37, followed by 99.12.

More important events are coming after the BoJ announcement, including the BoE and ECB's respective interest rate decisions and US employment data.

By FX Strategy Team, Published on 5th of September 2013
eTorro - Trading Starts Here

Start Trading Forex with up to $10,000

  • 100s Videos and FX Strategy articles
  • Advice from our FX traders
  • Practive free with using real time