Oil Finishes Solid Week Above $76

Written by Anthony Darvall

U.S. Dollar Trading (USD) the relief rally continued on Friday with stocks finishing at fresh month highs and investor sentiment remaining strong as Eurozone Banking concerns recede. Focus this week will turn to Q2 Company earning and the subsequent fluctuations of the stockmarket. In US stocks, DJIA +59 points closing at 10198, S&P +7 points closing at 1077 and NASDAQ +21 points closing at 2196. Looking ahead, Fed's Lacker Speaks.

The Euro (EUR) struggled as profit taking set in going into the weekend. Some positive news including the falling CDS spreads on Greece and European Bank Debt was overlooked as the size of the recent rally induced a modest pullback. EUR/USD traded with a low of 1.2608 and a high of 1.2722 before closing at 1.2639.

The Japanese Yen (JPY) held to a tight range with marginal losses against the USD. EUR/JPY and GBP/JPY finished slightly weaker but the AUD/JPY tracked the equity markets to finish at week highs. The weekend holds election risks for the Yen with the ruling DPJ party in danger of losing the majority in the upper house. Overall the USDJPY traded with a low of 88.38 and a high of 88.71 before closing the day around 88.64 in the New York session.

The Sterling (GBP) weak trade data did little to help the pair take advantage of the positive risk environment with cable falling below the 1.5100 in quiet trade on Friday. May Trade Balance fell to -8.1bn vs. -7bn forecast. EUR/GBP is holding just under the 0.8400 as the recent downtrend in questioned by the Euro recovery. Overall the GBP/USD traded with a low of 1.5052 and a high of 1.5202 before closing the day at 1.5060 in the New York session. Looking ahead, Q1 GDP Final forecast at 0.3%.

The Australian Dollar (AUD) with commodities enjoying gains across the board and sentiment towards the AUD returning to previous levels of enthusiasm, traders are once again looking for the uptrend to resume. Serious resistance remains at 0.8860 and future gains will remain beholden to movements in stocks. Overall the AUD/USD traded with a low of 0.8728 and a high of 0.8780 before closing the US session at 0.8760.

Oil & Gold (XAU) found strength in the US session breaking back above the psychological $1200 level to close above $1210. Overall trading with a low of USD$1194 and high of USD$1214 before ending the New York session at USD$1211 an ounce. Oil rallied for a 4th day as investors flocked back to commodities. WTI Oil Closed +$0.65 at $76.10 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2194

1.2480

1.2610

1.2807

1.3094

USD/JPY

85.87

86.97

89.00

89.42

89.98

GBP/USD

1.4857

1.5000

1.5045

1.5242

1.5391

AUD/USD

0.8450

0.8622

0.8755

0.8859

0.9000

XAU/USD

1166.00

1185

1210

1214

1244.00

OIL/USD

72.5

75.00

76.20

77.00

80.00

Euro - 1.2610

Initial support at 1.2480 (July 6 low) followed by 1.2194 (July 1 low). Initial resistance is now located at 1.2807 (76.4% retrace of 1.3094-1.1877) followed by 1.3094 (May 10 high)

Yen - 89.00

Initial support is located at 86.97 (July 1 low) followed by 85.87 (Nov 30, 2009 low). Initial resistance is now at 89.42 (June 28 high) followed by 89.98 (June 24 high).

Pound - 1.5045

Initial support at 1.5000 (Psychological level) followed by 1.4857 (Jun 25 low). Initial resistance is now at 1.5242 (38.2% retrace of 1.6878-1.4231) followed by 1.5391 (April 30 high).

Australian Dollar - 0.8755

Initial support at 0.8622 (July 8 high) followed by the 0.8450 (June 7 high). Initial resistance is now at 0. 8859 (June 21 high) followed by 0.9000 (Big Level).

Gold - 1210

Initial support at 1185 (July 7 low) followed by 1166 (May 21 low). Initial resistance is now at 1214 (July 5 high) followed by 1244 (July 1 high).

Oil - 76.20

Initial support at 75.00 (Intraday Support) followed by 72.50 (Intraday Support). Initial resistance is now at 77.00 (Intraday Resistance) followed by 78.00 (Intraday Resistance).