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Forex Trading: Asian Session Recap and Ranges

Posted by Akhilesh Ganti on Jul 30, 2013 10:53:00 PM

An understandably muted session as the market awaits the FOMC announcement and accompanying statement a bit later on today. The US Dollar is marginally stronger -vs- its major peers.

New Zealand's Business Sentiment index, which measures the optimism in the corporate sector, rose to +52.8%, the highest reading since 1999, as a clear majority expect the economy to improve over the next 12 months. This is in line with the RBNZ's contention that they may need to tighten their monetary policy in the near future. Australia's Private Sector Credit rose to +0.4%, beating analysts estimates of +0.3%.


The Euro is retaining its bid tone as it consolidates after breaching resistance at 1.3250 though momentum studies are indicating an overbought state. The next resistance level is at 1.3300, which if pierced, could see the pair take aim at the 1.3420 key resistance level. Conversely, initial support comes in around the 1.3220 level with stronger support at the 1.3160 region.


Cable has broken through support at 1.5260 on worries about what the new BOE governor will do when they announce the results of their policy meeting tomorrow. There is minor support around the 1.5220/1.5200, but key support comes in around 1.5150, a level that is sure to be tested if either Bernanke or Carney make statements that are not to the markets liking. On the other hand, if they maintain the status quo then the pair could reverse course and target the recent highs at 1.5435 ahead of key resistance at 1.5480. 


The Aussie is by far the weakest of the major pairs as economic data continues to disappoint thus paving the way for the RBA to cut rates again. Yesterday's breakdown has the pair taking dead aim at 7/12 lows of 0.8999, which if breached, could see a fairly rapid move to the key support level at 0.8780. Initial resistance is at 0.9130 with stronger resistance in the 0.9200/30 region.


Dollar/Yen appears content to play the bystanders' role for now as it ranges between support at 97.50 and resistance at 98.50. The recent move lower appears to be corrective in nature as the pair unwinds from its overbought condition. A decisive move below 97 or above 99 would be needed to determine its near term direction.   




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