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Session Recap: Aussie hit by dovish RBA; EUR/USD at key juncture

The Australian Dollar was the main laggard during the Asian session, after the RBA monetary decision threw cold water on long players hopes to appreciate the spot rate.

The RBA left rates unchanged at 3%, yet the accompanying statement was more dovish-than-expected, noting that "the inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand."

Another currency no longer enjoying the steady bids seen last week is the Euro, which is flirting with key area of confluence at 1.3480. If taken out, shorts may open the scope for further slides. However, the reality in the Euro is that, as RBS currency strategists Greg Gibbs notes, "EUR can still fall several big figures and still appear in a rising trend from its lows in July."

Main headlines in Asia

- Wall Street posts its worst day in 2013

- Australia January AIG Services PMI 45.3 (vs. 43.2 prior)

- Time to sell USD/JPY? - TDS

- AUD market sitting on very long speculative positions

- Obama signs temporary suspension of debt ceiling

- Australian trade deficit shrinks; house price index jumps

- China: HSBC China Services PMI (Jan): 54

- USD/JPY, smart money keeps buying off the 20-H4 EMA

- Euro to ‘relax’ lower then go up – FX Concept’s Taylor

- North Korea Nuclear Test x2

- PBoC to change Zhou Xiaochuan by next month

- RBA leaves rates unchanged at 3%; statement more dovish-than-expected

- AUD starting to get hit as flows intensify

- Australian investment growth slowdown another sign for the RBA to cut - NAB

- RBA: Chances of March rate cut seen at around 55%

- Morgan Stanley buying USD/YEN 2 1/2 big figures lower …

Forex: GBP/USD above 1.5750 ahead of London open

Cable has held up pretty strongly among majors for last Asia-Pacific session, last at near session highs 1.5762, up +0.43% for the week so far, following massive sell of over Friday, post-NFP. The pair is still capped below the 50% Fibo retrace of this leg down at 1.5775 price zone, yesterday's highs, and Friday's NY session lows.
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Forex: EUR/USD keeps the easing tone

The single currency is intensifying its bearishness on Tuesday, printing fresh lows in the area around 1.3470/65 ahead of services PMI in the euro area....
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