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During the Asian session today, the yen experienced unusual fluctuations. At noon, market rumors suggested that Japanese authorities had once again intervened in the foreign exchange market, causing the USD/JPY to jump from 78.40 to a session high of 79.40. However, it was quickly confirmed to be a rumor, and thus the foreign exchange market soon fell back to around 78.40.
Additionally, during the early session, the Reserve Bank of Australia released a quarterly monetary policy statement indicating that the central bank had considered raising interest rates at this Thursday's (the 4th) rate-setting meeting but ultimately decided on cautious observation due to high market uncertainty, which threatens global economic growth. The Reserve Bank of Australia pointed out that the impact of the debt crisis on the global economy is much more severe than expected. The main risk facing the global economy lies in the possibility of disorderly and destructive developments in the debt issues of Europe and America, leading to a rise in global risk aversion sentiment and uncertainty.
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Without a doubt, tonight's non-farm payroll data will become the main focus of the market, directly influencing the direction of the foreign exchange market. Last night, the U.S. Department of Labor reported that last week's initial jobless claims decreased by 1,000 to 400,000, better than the expected increase to 405,000, indicating some relief in unemployment pressure. However, there is still a significant gap to reversing the high unemployment rate of 9.2%. Moreover, July and August are months when graduating students enter the job market, increasing labor supply. Therefore, expectations for tonight's non-farm payrolls are not very optimistic.
AUD/USD:
Australia's statement has put the Australian dollar under pressure again, with another decline following an ineffective rebound during the Asian session. The main reason remains the lack of confidence among investors in the global economic recovery. We see that international commodity prices centered on crude oil also saw a plunge yesterday, all of which have suppressed the trend of the Australian dollar. From a technical chart perspective, support for the Australian dollar lies near 1.040. If it can stabilize above this level, it might continue to rise above 1.07. From a long-cycle perspective, the U.S. economic situation is increasingly approaching the launch conditions for QE3, so overall, the outlook for the Australian dollar remains positive. It is recommended to buy on dips for medium-term positions.
USD/JPY:
Yesterday, the Bank of Japan intervened in the market, causing the dollar against the yen to fall by over 300 points, with a drop exceeding 4%. This was the first time since March 18th of this year that Japanese authorities sold yen to intervene in the exchange rate. However, due to the impact of the global economic slowdown, capital flowed back into yen positions overnight, causing the USD/JPY to fall again. It is anticipated that Japanese authorities may continue to sell yen in the short term, making it likely that the yen will face downward pressure in the near future.
However, from a mid-term perspective, as economic data from Europe and America indeed show rapid declines, the USD/JPY may remain below 80 for a long period. Thus, the effect of this round of intervention is likely only temporary. After the intervention stops, the yen may consolidate for some time before continuing its upward trend. In the long run, the overall upward trend of the yen will not change.
Gold:
Gold received support from safe-haven buying last night, refreshing its record high at $1681.67 before pulling back. Weak U.S. economic data pressured the dollar index, and more importantly, expectations for QE3 laid the foundation for gold's upward trend. This U.S. debt solution is unfavorable for the Democratic Party, so it is highly possible that monetary policies will be used again to adjust the U.S. economy in the future.
Given the excessive short-term gains in gold, there is indeed a need for correction. Therefore, buying gold on dips remains the best trading strategy. Support lies at $1650 and $1635. Investors can appropriately place orders. Tonight's U.S. non-farm payroll data may have a significant impact on the market. It is expected that the non-farm payroll data will be poor, which will be beneficial for gold's upward movement. Therefore, risk-seeking investors can enter light positions to go long.
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