General Commentary
Last week’s currency trading review
The EUR/USD had a dramatic reversal once again falling to new cycle lows under 1.2300 falling pretty much for the whole week down over 300 pips as support evaporated on Euro debt concerns. The heavy selling post bailout underpins how weak the single currency is with most other pairs only falling marginally. EUR/AUD has fallen to record lows and the EUR/GBP closed under 0.8000 as the downtrend continued in both.
The USD/JPY tested Y80 for most of the week on USD strength from the EUR/USD selling but the EUR/JPY is slumping below Y100 and is causing BOJ officials a headache as they try to stop the Yen from strengthening. The BOJ meet this week and are likely to increase easing in some form or threaten markets with verbal intervention at least.
The AUD/USD has held on to most of the gains from the previous week’s rally with a test of 1.0300 failing as the EUR/USD slumped and US stocks fell. The EUR/AUD has fallen to 1.2000 and is at new record lows with talk of a new carry trade emerging against the 0.75% interest rate Eurozone. That being said such AUD strength will require a strong US and China economy and both of these are under pressure.
Currency Movement last week
EUR/USD was down -2.99% closing at 1.2286, after opening the week at 1.2653.
USD/JPY was down -0.15% closing at 79.67, after opening at 79.79.
GBP/USD was down -1.41% closing at 1.5485 after opening at 1.5704.
AUD/USD was down -0.30% closing at 1.0209 after opening at 1.0240.
This Week’s Trading Preview
