The Canadian Dollar Outlook Hinges On BoC Rate Decision, Policy Report

The Canadian Dollar Outlook Hinges On BoC Rate Decision, Policy Report
Analyst 14. Juli 2012 00:00 GMT 

undamentale Prognose für Gold: Baisse
Der kanadische Dollar gewann an Boden gegen Gegenstück U.S. inmitten den Rebound in Gefahr Gefühl kann, doch die Loonie zu behaupten die Bank of Canada einen vorsichtigen Ausblick für die Region Streik sollte nächste Woche. Das BoC Zinssatz Entscheidung das größte Ereignisrisiko für die folgende Woche zeigt, wie Gouverneur Mark Carney sich Spekulationen für höhere Fremdkapitalkosten spricht, aber Marktteilnehmer weiter können, zurück zu skalieren Wetten für eine Zinsanhebung die Staatsschulden-Krise weiterhin eine Bedrohung für die Region darstellen.
Tatsächlich Gouverneur Carney machte zahlreiche Versuche, auf den Datensatz Anstieg der Haushaltsverschuldung zu sprechen, und vielleicht sehen wir die Zentralbank Kopf weiterhin die Idee für eine mögliche Zinserhöhung inmitten Ängste vor einer Immobilienblase zu schweben. Obwohl wir Lichtblicke in der kanadischen Wirtschaft sehen, beschränkten die BoC Gesichter Bereich um das Normalisieren Geldpolitik inmitten der anhaltenden Turbulenzen in Europa. Dadurch können wir die Zentralbank seine warten-and-See-Ansatz in 2013 tragen sehen. In einer Umfrage von Bloomberg News Übernachtung alle der 22 Ökonomen Befragten Prognose BoC Zinssatz 1,00 % halten, während den Marktteilnehmern die Zentralbank Festhalten an seiner warten-and-See-Ansatz über die nächsten 12 Monate laut Credit Suisse finden Sie unter Index Swaps.
Zur gleichen Zeit werden wir genau verfolgt werden den vierteljährlichen geldpolitischen Bericht due out am 18. Juli wie die Zentralbank ihre aktualisierten Prognose für Wachstum und Inflation sowie den Bericht mein Highlight eine geschwächte Outlook für die Region präsentieren wird wie die USA – Kanadas größter Handelspartner – eine Verlangsamung Erholung steht. Wiederum die frische Charge der Zentralbank Rhetorik kann dämpfen die Beschwerde mit dem kanadischen Dollar, aber der Verbraucherpreis-Bericht vom Fass für Freitag erneuere Spekulation für höhere Kreditkosten wie die Kern-Rate der Inflation erwartet wird, um im schnellsten Tempo für 2012 zu erweitern. Als die USDCAD weiterhin über die 78.6 % Fibonacci-Retracement aus der 2007 halten, niedrig, die 2009 um hohe 1.0100-10, wir sehen weiterhin, dass das Paar eine kurzfristige Basis um die Kennzahl aufbauen und die technische Perspektiven flößt eine Hausse Voreingenommenheit für die Dollar-Loonie als der relative Stärke Index Pausen heraus von den Abwärtstrend. Wiederum eine ganze Reihe von Leitzinssenkung Kommentare von BoC einen anderen laufen bei 1.0400 auslösen kann, und frische 2012 Höhen des Wechselkurses können wir sehen, wie er sich ein höheres tief im Juli schnitzt. -DS
DailyFX bietet Forex News und technische Analyse zu den Trends, die die globalen Devisenmärkten beeinflussen.
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14. Juli 2012 00:00 GMT

£/$ GBPUSD: Trading of the Bank of England interest rate decision

Trading the News: Bank of England Interest Rate Decision

What’s Expected:

Time of release: 05/10/2012 11:00 GMT, 7:00 EDT

Primary Pair Impact: GBPUSD

Expected: 325B

Previous: 325B

DailyFX Forecast: 325B

Why Is This Event Important:

Although the Bank of England is widely expected to maintain its current policy stance in May, the bullish sentiment underlining the British Pound may gather pace as the central bank adopts a hawkish tone for monetary policy. As the BoE preserve its wait-and-see approach, we may see the Monetary Policy Committee refrain from releasing a policy statement, but the quarterly inflation on tap for May 16 may trigger fresh highs in the GBPUSD should the central bank raise its fundamental assessment for the U.K. Indeed, we should see the MPC move away from its easing cycle as BoE officials anticipate to see a faster recovery in the second-half of the year, and the board may start to lay out a tentative exit strategy as the stickiness in underlying price growth raises the risk for inflation.

Recent Economic Developments

Release	Expected	Actual
Retail Sales ex Auto Fuel (MoM) (MAR)	0.4%	1.5%
Consumer Price Index (YoY) (MAR)	3.4%	3.5%
Producer Price Index - Outputs (YoY) (MAR)	3.5%	3.6%

The Downside

Release	Expected	Actual
Halifx House Prices (3MoY) (APR)	0.4%	-0.5%
Gross Domestic Product (QoQ) (1Q A)	0.1%	-0.2%
Average Weekly Earnings (3MoY) (FEB)	1.2%	1.1%

As the outlook for growth and inflation picks up, we should see the BoE adopt a hawkish tone for monetary policy, and a fresh batch of central bank rhetoric may spark fresh highs in the GBPUSD as market participants start to look for a rate hike. However, the ongoing slack within the real economy paired with the slowdown in wage growth may encourage the BoE to strike a balanced tone for the region, and we may see the central bank carry its current policy stance into the second-half of the year as the recession in the euro-area – Britain’s largest trading partner – dampens the outlook for growth. In turn, a neutral policy statement may halt the bullish run in the GBPUSD, and the pair may ultimately face range-bounce prices as market participants maintain bets for more easing.

Potential Price Targets For The Rate Decision

A look at the encompassing structure sees the pound continuing to trade within the confines of a well-defined ascending channel formation dating back to the January low with the downside correction off the 2012 high at 1.63 finding ample support at the 61.8% Fibonacci extension taken from the January and March troughs at 1.6070. While our medium-term bias remains weighted to the topside, it’s important to note that broader risk trends may continue to drag on the pound, limiting advances in the near-term. We continue to favor long entries between the 1.60-handle (channel support) and the 1.6070-mark with a breach above the 78.6% extension at the 1.62-figure dispelling further downside pressure. Such a scenario eyes topside targets at the 1.63-handle and the 100% extension at 1.6360.

The scalp chart shows the GBPUSD holding within the confines of a descending channel formation dating back to the April 30th high with the pair testing channel support early in the US session. Soft interim support rests at 1.6130 backed by the 61.8% Fibonacci extension taken from the March 12th and April 5th troughs at 1.6088 and 1.6065. A break below the 50% extension at 1.6035 risks further losses for the pound with subsequent floors seen at the 1.60-figure and the 38.2% extension at 1.5980. A breach above channel resistance targets the 78.6% extension at 1.6165, the 1.62-figure, 1.6235 and the 100% extension at 1.6265, with a breach above the 2012 high at 1.63 exposing our objective at 1.6360. As the BoE maintains its current policy we may see a muted reaction to the release. However we will be closely eyeing these levels as we head into the quarterly inflation report due out on May 16th.

How To Trade This Event Risk

Trading the BoE rate decision may not be as clear cut as some of our previous trades as the BoE is widely expected to preserve its current policy stance, but a hawkish policy statement could set the stage for a long British Pound trade as it raises the scope for a rate hike. Therefore, if the central bank sees a greater risk for inflation and continues to favor a stronger recovery for the second-half of 2012, we will need a green, five-minute candle following the decision to generate a buy entry on two-lots of GBPUSD. Once these conditions are fulfilled, we will set the initial stop at the nearby swing low or a reasonable distance from the entry and this risk will establish our first target. The second objective will be based on discretion, and we will move the stop on the second lot to cost once the first trade hits its mark in order to preserve our profits.

On the other hand, we may see board member David Miles continue to push for more quantitative easing amid the ongoing slack within the real economy, and the majority may carry its neutral policy stance into the third-quarter in an effort to encourage a stronger recovery. As a result, if we see a growing rift within the MPC, with the board highlighting the downside risks surrounding the region, we will carry out the same strategy for a short pound-dollar trade as the short position laid out above, just in reverse.

Impact that the Bank of England Interest Rate Decision has had on GBP during the last meeting

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

April 2102 Bank of England Interest Rate Decision

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
APR 2012	04/05/2012 11:00 GMT	325B	325B	+26	+4

As expected, the Bank of England preserved its current policy in April, which produced a fairly muted reaction in the British Pound, but the meeting minutes sparked a sharp rally in the GBPUSD as the MPC voted 8-1 to keep the benchmark interest rate at 1.00% while holding the asset purchase target at GBP 325B. Indeed, board member Adam Posen scaled back his view for more QE as BoE officials expect to see a stronger recovery later this year, and it seems as though the central bank is looking to conclude its easing cycle this year as the committee no longer sees a risk of undershooting the 2% target for inflation.

€/$ EURUSD: Trading the European Central Bank Interest Rate Decision

Trading the News: European Central Bank Interest Rate Decision
What’s Expected:
Time of release: 05/03/2012 11:45 GMT, 7:45 EDT
Primary Pair Impact: EURUSD
Expected: 1.00%
Previous: 1.00%
DailyFX Forecast: 1.00%
Why Is This Event Important:
Although the European Central Bank is widely expected to keep the benchmark interest rate at 1.00%, the fresh batch of comments from President Mario Draghi could drag on the EURUSD should the central bank head show an increased willingness to expand monetary policy further. As the sovereign debt crisis continues to dampen the outlook for the euro-area, the policy statement may sound a bit more dovish this time around, and the Governing Council may look to target the benchmark interest rate as the slew of non-standard measures appear to be having a limited impact on the real economy. As the threat for a prolonged recession casts a bearish outlook for the single currency, the rate decision could serve as a catalyst to spark a sharp selloff in the EURUSD, and the bearish formation should continue to take shape as price action approaches the apex of the descending triangle.
Recent Economic Developments
The Upside
Euro-Zone Consumer Price Index Estimate (YoY) (APR)
Euro-Zone Consumer Price Index (YoY) (MAR)
Euro-Zone Producer Price Index (YoY) (FEB)
The Downside
Euro-Zone Unemployment Rate (MAR)
Euro-Zone Purchasing Manager Index Composite (APR A)
Euro-Zone Gross Domestic Product (QoQ) (4Q P)
Despite the weakening outlook for the euro-area, heightening price pressures may encourage the ECB to draw up a more balanced tone for the region, and the central bank may endorse a wait-and-see approach throughout the first-half of the year as it preserve its one and only mandate to ensure price stability. However, the ongoing weakness in the labor market paired with fears of a deep recession may bring about a very dovish policy statement, and the Governing Council may look to carry its easing cycle into the second-half of the year in an effort to encourage a stronger recovery.
Potential Price Targets For The Rate Decision

 A look at the encompassing structure sees the EURUSD trading within the confines of a broad descending channel formation dating back to the August highs with the single currency rebounding off channel resistance of an embedded channel dating back to the February highs. Key daily resistance stands at the 1.33 figure with a breach above this level challenging the 1.34-figure and the February highs at 1.3485. Daily support rests with the 100-day moving average at 1.3115 and the 1.30-figure.

 The scalp charts shows somewhat of a mixed outlook for the EURUSD. Clear bearish divergence in the relative strength index alluded to the euro’s decline today with the single currency rebounding off the 38.2% Fibonacci extension taken from the March 27th and May 1st crests at 1.3130 before encountering soft resistance at 1.3165. Subsequent resistance levels are eyed at the 23.6% extension at 1.3190 backed by 1.3210, 1.3240 and 1.3260. A breach above the May 1st high at 1.3280 negates this specific setup with such a scenario eyeing targets above the 1.33-handle. Interim support rests with the 38.2% extension with support targets seen lower at 1.3110, the 50% extension at 1.3085 and 1.3060. The initial objective remains the 1.30 figure which has been met with sharp rebounds over the past three months each time the level has been tested. Should the print prompt a bearish response look to target downside levels with a break below the 1.30-threshold offering further conviction on our directional bias.
How To Trade This Event Risk
Trading the interest rate decision may not be as clear cut as some of our previous trades as ECB President Mario Draghi is scheduled to speak at 12:30 GMT, but the policy statement may pave the way for a long Euro trade should the central bank strike a balanced outlook for the region. Therefore, if Mr. Draghi talks down the risks surrounding the region and highlights the recent pick up in price growth, we will need a green, five-minute candle following the release to generate a buy entry on two-lots of EURUSD. Once these conditions are met, we will set the initial stop at the nearby swing low or a reasonable distance from the entry, and this risk will establish our first target. The second objective will be based on discretion, and we will move the stop on the second lot to breakeven once the first trader hits its mark in order to protect our profits.
In contrast, the ongoing weakness in the real economy paired with the threat for contagion may ultimately lead to a very dovish ECB, and we may see the central bank head may endorse the easing cycle as the fundamental outlook for the region remains bleak. As a result, if the Governing Council opens the door for additional monetary support, we will implement the same setup for a short euro-dollar trade as the long position laid out above, just in the opposite direction.
Impact that the European Central Bank Interest Rate Decision has had on EUR during the last meeting
Pips Change
(1 Hour post event )
Pips Change
(End of Day post event)
April 2012 European Central Bank Interest Rate Decision

 As expected, the European Central Bank struck a cautious outlook for the region after keeping the benchmark interest rate at 1.00%, while central bank President Mario Draghi argued that ‘any exit strategy talk for the time being is premature’ as the region faces a double-dip recession. The dovish tone held by the ECB dragged on the Euro, with the EURUSD falling back towards the 1.3100 figure, but we saw the single currency consolidate during the North America trade to end the day at 1.3140.

$$ Australian dollar sold aggressively shocking RBA rate decision

-RBA shocks markets and cuts of 50 bps to 3.75 %

-Surprising decision history RBA holding

-Aussie sold aggressively across the Board in response

-The China manufacturing PMIS are lower than expected

-Yen continues to offers; but limited additional upside

Trade in may began with a bang after the RBA is out and shocked markets by cutting rates 50 bps to 3.75% (consensus had called for a 25bp cut). Although there is talk of the need for a 50bp of the Australian Central Bank, many, including ourselves, do not believe that the Central Bank would move so aggressively because of their traditionally more hard and less concerned about the prospects of the local and global economy. The shock was not that rates were reduced to 50 bit/s, but that a Central Bank which has persistently made an error on the hard side throughout the crisis world, finally surrendered and woke up to the reality. Better late than never, and fully support us the decision of the Central Bank and notice that there is a clarity finally present that has long been absent.

In the statement accompanying it, the RBA cited softer economic conditions, housing difficulties and a moderation of inflation. We believe that it is a very important decision which will have a greater influence on the market in the coming weeks. The RBA decision reaffirmed our basic view that we are still not at the end of the global crisis and only now enter the third and final phase which will intensify in the block of the products and the emerging market economies. China is at the Centre of this third phase and evidence being continuous slowdown of the Chinese economy should weigh heavily on the economies of correlation. Australia, the other block of raw material economies and emerging markets will suffer from this downturn and we believe that better trade moving forward is short goods block and EM and long major currencies.

While it is difficult to concentrate on anything at this time other than the RBA decision day, the latest data of China should certainly not be ignored, with manufacturing PMIS from milder than expected. This highlights our view and we suspect that the Australian Dollar a lot of inconvenience, especially now that the interest rate differentials and the negative report are much less daunting. Australian bulls could claim that the drop rate is positive for risk, as it is now a much more accommodating environment that will help stimulate the economy, but we buy not in this assertion, that we feel the RBA has fallen too far behind the curve and will have to play a game of catch ("get down" is perhaps more appropriate).

In addition, it will be useful to keep an eye on EUR/USD to see if the market can still push higher to test the main obstacles by 1.3300. USD/JPY is also in the securities of FX with the pair of large falling to charge several days low back below $80.00. From here, it seems that there are still deeper setbacks room, but we do not provide an expectation of the record lows of 2011 and recommend instead the search for opportunities to buy the hollow below 79.00.

TRADE OF THE DAY

EUR/USD: (this recommendation was issued last week but have been revised at the entrance and it stops). (See below). Although the last rally was impressive, we support the market is still locked in a more well defined medium to the downward trend in the long term from the record highs of 2008, and as such, seeking to sell rallies in 2012 is the best strategy. The rally has now expanded beyond 1.3200 and from there we see scope for further upside through 1.3300. However, once the 1.3300 level is tested and broken, there is a very strong technical argument for a bearish resumption. Looking at 1.3300 level shows a confluence of resistance which includes the obvious psychological barrier itself, with resistance fall of February 2012 peak trend line, band upper bollinger and a very beautiful fib of 78.6% trace off the coast of the most recent March-April, 1. 34400-1. 3000 down move. Thus, we really like the idea of the discoloration and overshoots beyond 1.3300 and place our entry accordingly. STRATEGY: Sell to 1.3320 for an open goal; STOP-LOSS on any daily closing (5 pm NEW York City time) over 1.3420.

ECONOMIC CALENDAR

""::"" Sold aggressively Aussie Post shocking RBA rate decision; Euro provides yet

-RBA shocks markets and cuts of 50 bps to 3.75 %
-Surprising decision history RBA holding
-Aussie sold aggressively across the Board in response
-Making UK that PMIS disappoint; weighs on the book
-The China manufacturing PMIS are lower than expected
-Yen continues to offers; but limited additional upside
Trade in may began with a bang after the RBA is out and shocked markets by cutting rates 50 bps to 3.75% (consensus had called for a 25bp cut). Although there is talk of the need for a 50bp of the Australian Central Bank, many, including ourselves, do not believe that the Central Bank would move so aggressively because of their traditionally more hard and less concerned about the prospects of the local and global economy. The shock was not that rates were reduced to 50 bit/s, but that a Central Bank which has persistently made an error on the hard side throughout the crisis world, finally surrendered and woke up to the reality. Better late than never, and fully support us the decision of the Central Bank and notice that there is a clarity finally present that has long been absent.
Relative performance against the USD Tuesday (from 11: 00GMT)
EUR + 0.15 %
CHF + 0.14 %
CAD-0,02 %
JPY-0,06 %
GBP-0.15 %
NZD-0.72 %
AUD-1,08 %
In the statement accompanying it, the RBA cited softer economic conditions, housing difficulties and a moderation of inflation. We believe that it is a very important decision which will have a greater influence on the market in the coming weeks. The RBA decision reaffirmed our basic view that we are still not at the end of the global crisis and only now enter the third and final phase which will intensify in the block of the products and the emerging market economies. China is at the Centre of this third phase and evidence being continuous slowdown of the Chinese economy should weigh heavily on the economies of correlation. Australia, the other block of raw material economies and emerging markets will suffer from this downturn and we believe that better trade moving forward is short goods block and EM and long major currencies.
While it is difficult to concentrate on anything at this time other than the RBA decision day, the latest data of China should certainly not be ignored, with manufacturing PMIS from milder than expected. This highlights our view and we suspect that the Australian Dollar a lot of inconvenience, especially now that the interest rate differentials and the negative report are much less daunting. Australian bulls could claim that the drop rate is positive for risk, as it is now a much more accommodating environment that will help stimulate the economy, but we buy not in this assertion, that we feel the RBA has fallen too far behind the curve and will have to play a game of catch ("get down" is perhaps more appropriate).
In addition, it will be useful to keep an eye on EUR/USD to see if the market can still push higher to test the main obstacles by 1.3300. USD/JPY is also in the securities of FX with the pair of large falling to charge several days low back below $80.00. From here, it seems that there are still deeper setbacks room, but we do not provide an expectation of the record lows of 2011 and recommend instead the search for opportunities to buy the hollow below 79.00. Finally, the book is looking a little tired an impressive surge of several days and the weaker than expected manufacturing PMIS helped to inspire the other offers of annual summits and last against the Dollar and the Euro.
TRADE OF THE DAY
EUR/USD: (this recommendation was issued last week but have been revised at the entrance and it stops). (See below). Although the last rally was impressive, we support the market is still locked in a more well defined medium to the downward trend in the long term from the record highs of 2008, and as such, seeking to sell rallies in 2012 is the best strategy. The rally has now expanded beyond 1.3200 and from there we see scope for further upside through 1.3300. However, once the 1.3300 level is tested and broken, there is a very strong technical argument for a bearish resumption. Looking at 1.3300 level shows a confluence of resistance which includes the obvious psychological barrier itself, with resistance fall of February 2012 peak trend line, band upper bollinger and a very beautiful fib of 78.6% trace off the coast of the most recent March-April, 1. 34400-1. 3000 down move. Thus, we really like the idea of the discoloration and overshoots beyond 1.3300 and place our entry accordingly. STRATEGY: Sell to 1.3320 for an open goal; STOP-LOSS on any daily closing (5 pm NEW York City time) over 1.3420.
ECONOMIC CALENDAR

Commerce Bank of reserve of the Australia interest rate decision

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February 6th, 1: 41 pm by Sam
The Reserve Bank of Australia is scheduled to announce its interest rate decision at 3: 30 am London time on February 7th. Analysts are forecasting that the RBA will cut rates by 25 basis points. Australia has been one of the best performing economies in 2011 despite a global financial crisis due to the sovereign debt issues in Europe. The Australian Dollar has gained nearly 800 pips against the U.S. Dollar since the last rate decision. The RBA has delivered two consecutive rate cuts of 25 basis points in November and December; However the Aussie continues to attract safe haven capital flow because of the strong local economy.
OpenBook top trader waleed0987 has been bearish on the AUDUSD. While this trader has been trading against the trend, he has managed to squeeze small profits from his short positions between 2% and 8%. Ahead of the RBA rate decision, this trader has a short AUDUSD position with target at 1.0462. Trader waleed0987 has 1438 copiers and 8872 followers on OpenBook.

Recent Australian Economic developments to take in consideration
Australia reported a trade surplus of $1.7 million in December, an increase of $366 million in surplus from November. The unemployment rate held at 5.2% in December. CPI rose 3.1% on an annual basis in the fourth quarter compared to a rise of 3.5% on an annual basis in the third quarter.
Market Reaction to previous RBA rate decision
At its last policy meeting, the AUDUSD dropped 60 pips immediately after the rate cut was announced.
Scenario A: RBA cuts rates by 25 basis points
This scenario is widely expected. In this scenario, the AUDUSD might drop 60 pips after the rate decision
Scenario B: RBA cuts rates by 50 basis points
If the RBA believes that the situation in Europe does not have a quick fix and decides to lower by 50 basis points, we might see the AUDUSD drop by 100 pips.
Scenario C: RBA leaves rates unchanged
If the RBA takes a neutral stance, we might see the AUDUSD continued its trend and rally higher towards 1.1000.
OpenBook:
Traders on OpenBook are primarily bearish on AUDUSD with average limits at 1. 0550and stops at 1.0800.
OpenBook trader molla01 is a single trader as this trader focuses on trading just the AUDUSD. The trader has had an impressive run so far with 170% returns in the last seven days and 749% returns in the last thirty days. This trader has been trading on a 100 pip move in the hand by shorting near 1.0540 and closing near 1.0444. This strategy has netted the trader close to 95% returns with his medium risk strategy. The trader has also been looking for buying opportunities near 1.0690 and closing near 1.0760 with gains near 100%. This trader has also built up a sizeable long exposure on the AUDUSD and is expecting the hand to target 1.0670. While the vast majority of traders are bearish on AUDUSD, this trader has simply followed the AUDUSD trend and looked for buying opportunities. With 76.3% of this trader's trades in the buy direction, we are waiting to see if this trader will switch his opinion depending on the RBA rate decision. This trader has 4 copiers and 28 followers on OpenBook.

FOREX NEWS-Euro resilient; Aussie eyes RBA rate decision

* Markets appear optimistic that Greece will secure rescue deal
* Athens baulking at accepting painful terms for new package
* Aussie holds firm in face of possible rate cut by RBA
By Ian Chua
SYDNEY, Feb 7 (Reuters) - The euro held steady in Asia on Tuesday as markets remained sanguine that Greece will eventually clinch a rescue package, even as the country's political leaders delayed their decision to accept painful terms by yet another day.
Failure to secure the 130 billion euro ($170 billion) rescue would risk pushing Athens into a chaotic debt default and destabilise the entire euro zone, an outcome deemed too extreme to contemplate.
That was seen keeping euro bears restrained for now at least, resulting in a volatile but resilient single currency. It stood at $1.3122 on Tuesday, little changed from late New York levels. A recovery from $1.3026 overnight kept the common currency within reach of a six-week peak around $1.3230 set last week.
Only a clear break of $1.3020 would see the euro move to $1.2930-50, the Jan 25 low and then to $1.2855-75 the 61.8 percent retracement of the $1.2624-1.3233 rally in January, traders said.
Still, without a clear outcome for Greece, the euro will remain choppy.
"The stalemate among the three political parties comes ahead of the April elections, implying that this in large part could be domestic politicking," analysts at BNP Paribas wrote in a note. "As these talks continue, the euro will likely remain vulnerable to any headline risk."
The euro's resilience saw the dollar index retreat to 79.076, from a session high of 79.516, still uncomfortably close to an 8-week trough of 78.623 plumbed on Feb 1.
Against the yen, the dollar was steady at 76.55, taking a breather after creeping up from 76.20 on the back of upbeat U.S. jobs data last Friday.
Among commodity currencies, the Australian dollar is the one to watch ahead of the Reserve Bank of Australia's (RBA) rate decision due at 0330 GMT. It stood at $1.0720, near a six-month peak set last week.
Interbank futures imply a 56 percent chance of a 25 basis point cut to the 4.25 percent cash rate, while many analysts polled by Reuters believe the RBA has room to cut given a benign inflation environment.
"The RBA may well take advantage of an overbought AUD/USD to squeeze it lower by proving more dovish than expected," said Sebastien Galy, strategist at Societe Generale.
"The washout should be an opportunity to sell the downside in AUD/USD as it is likely to remain very much bid as a high yielding currency in an environment of extremely low yields and this in spite of deteriorating fundamentals."
Should the RBA surprise by leaving rates unchanged, the Aussie could re-test Friday's peak and then target the 29-year high of $1.1081 set in July.

OpenBook Traders Gear up for RBA Rate Decision

(eToro Blog) With a relatively light economic calendar, Asian markets traded lower as skepticism focused on the EU economic summit starting today. The Nikkei was down 58 points, the Hang Seng was down 253 points and the Australian S&P ASX was down 14 points.  After the rate decisions last from BOJ, Fed and RBNZ, focus shifts on the RBA rate decision on February 7th. The majority of OpenBook traders are short on the AUDUSD with average limits at 1.0450 and stops at 1.0650. Ahead of the rate decision OpenBook traders are using various strategies on the pair to net gains.

OpenBook trader molla01 has become an expert on trading the AUDUSD with his performance in the last week. This trader with 2 copiers and 11 followers on OpenBook has returned over 200% in the last week by trading the AUDUSD. This trader has been trading on a 100 pip move in the pair by shorting near 1.0540 and closing near 1.0444. This strategy has netted the trader close to 95% returns with his medium risk strategy. The trader has also been looking for buying opportunities near 1.0450 and closing near 1.0577 with gains near 100%. This trader has also built up a sizeable long exposure on the AUDUSD and is expecting the pair to target 1.0670.

OpenBook trader sliderking who hails from Australia is another trader who has done well in trading the AUDUSD. The trader is a short term trader unlike trader molla01 and has been scalping the pair for a few pips at a time. This trader makes his own decisions while trading the AUDUSD but relies on CopyTrader for guidance on other pairs. For EURUSD, this trader is copying top trader NMarijus. In the last several days, this trader has obtained gains as high as 32% while scalping the AUDUSD. This trader does use high risk strategies to maximize their gains during scalping.

In economic news relative to Australia, the credit rating agency Fitch has warned that it could cut the AA credit rating of Australia’s four largest banks because of their reliance on offshore borrowing to fund their lending activities. This move by Fitch follows a similar action taken by Standard and Poor’s credit rating agency in November 2011. Australian banks continue to be one of the highest rated banks in the world in spite of the downgrade threat. The four banks in question are Commonwealth Bank, Westpac Bank, National Australia Bank and ANZ.

 

OpenBook Traders Gear up for RBA Rate Decision

With a relatively light economic calendar, Asian markets traded lower as skepticism focused on the EU economic summit starting today. The Nikkei was down 58 points, the Hang Seng was down 253 points and the Australian S&P ASX was down 14 points.  After the rate decisions last from BOJ, Fed and RBNZ, focus shifts on the RBA rate decision on February 7th. The majority of OpenBook traders are short on the AUDUSD with average limits at 1.0450 and stops at 1.0650. Ahead of the rate decision OpenBook traders are using various strategies on the pair to net gains.
OpenBook trader molla01 has become an expert on trading the AUDUSD with his performance in the last week. This trader with 2 copiers and 11 followers on OpenBook has returned over 200% in the last week by trading the AUDUSD. This trader has been trading on a 100 pip move in the pair by shorting near 1.0540 and closing near 1.0444. This strategy has netted the trader close to 95% returns with his medium risk strategy. The trader has also been looking for buying opportunities near 1.0450 and closing near 1.0577 with gains near 100%. This trader has also built up a sizeable long exposure on the AUDUSD and is expecting the pair to target 1.0670.
OpenBook trader sliderking who hails from Australia is another trader who has done well in trading the AUDUSD. The trader is a short term trader unlike trader molla01 and has been scalping the pair for a few pips at a time. This trader makes his own decisions while trading the AUDUSD but relies on CopyTrader for guidance on other pairs. For EURUSD, this trader is copying top trader NMarijus. In the last several days, this trader has obtained gains as high as 32% while scalping the AUDUSD. This trader does use high risk strategies to maximize their gains during scalping.
In economic news relative to Australia, the credit rating agency Fitch has warned that it could cut the AA credit rating of Australia’s four largest banks because of their reliance on offshore borrowing to fund their lending activities. This move by Fitch follows a similar action taken by Standard and Poor’s credit rating agency in November 2011. Australian banks continue to be one of the highest rated banks in the world in spite of the downgrade threat. The four banks in question are Commonwealth Bank, Westpac Bank, National Australia Bank and ANZ.