Volatile Markets, Yen Intervention Talks
Written by Anthony Darvall
U.S. Dollar Trading (USD) was weaker as Asian equities rebounded but with US stocks remaining under pressure the Dollar resumed its strength across the board. Weekly Jobless Claims caused concern again at 484 vs. 465k forecast and is creeping higher in recent weeks. In US stocks, DJIA -58 points closing at 10320, S&P -5 points closing at 1083 and NASDAQ -18 points closing at 2190. Looking ahead, July Retail Sales are forecast at 0.5% vs.-0.5% previously. Also released, August Consumer Confidence forecast at 69.3 vs. 67.8 previously.
The Euro (EUR) was sold on the rallies as European banking concerns remained in the spotlight and risk was turned off. EUR/JPY was volatile on Japanese intervention fears but a rally in Asia was sold aggressively in Europe after weak economic data. June Industrial Production fell -0.1% vs. 0.7% forecast. EUR/USD traded with a low of 1.2781 and a high of 1.2934 before closing at 1.2830. Looking ahead, Q2 German GDP forecast at 1.3% vs.0.2% previously and Q2 EU GDP forecast at 0.7% vs. 0.2% previously.
The Japanese Yen (JPY) USD/JPY tested below Y85 but was then bought aggressively as the Verbal Intervention from the Japanese government intensified with talk of rate checks from the BOJ throughout the Asian session and a press conference held by Noda in which he cautioned again he was watching the FX market closely. Overall the USDJPY traded with a low of 84.92 and a high of 86.20 before closing the day around 85.90 in the New York session.
The Sterling (GBP) the market bounced to in Asia to 1.5700 but was then sold aggressively down to the mid 1.55 region on fresh risk aversion and USD strength. The mood has changed dramatically in the past 4 days towards the UK economy and the Pound with the Austerity budget and weakness in house prices seen as pushing the fragile recovery back into recession. Overall the GBP/USD traded with a low of 1.5559 and a high of 1.5717 before closing the day at 1.5590 in the New York session.
The Australian Dollar (AUD) some mixed Unemployment data sent the Aussie to day lows but strength in AUD/JPY allowed a test of 0.9000 in early Europe. July Employment Change +23.5k vs. +20k forecast, Unemployment Rate jumps to 5.3% vs. 5.1% previously. Overall the AUD/USD traded with a low of 0.8912 and a high of 0.9010 before closing the US session at 0.8960.
Update Oil & Gold (XAU) gold pushed higher on alternate investment demand. Overall trading with a low of USD$1197 and high of USD $1216 before ending the New York session at USD$1212 an ounce. Oil continued to suffer in the 'risk off' environment. WTI Oil Closed -$2.28 at $75.74 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.2850
Initial support at 1.2737 (July 22 low) followed by 1.2523 (July 13 low). Initial resistance is now located at 1.3074 (Aug 10 low) followed by 1.3334 (August 6 high)
Yen - 86.15
Initial support is located at 84.70 (August 11 low) followed by 83.50 (June 1995 low). Initial resistance is now at 86.66 (August 3 high) followed by 88.12 (July 28 high).
Pound - 1.5615
Initial support at 1.5400 (July 26 low) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5713 (August 12 high) followed by 1.5999 (Aug 6 high).
Australian Dollar - 0.8990
Initial support at 0.8896 (July 23 high) followed by the 0.8738 (July 22 low). Initial resistance is now at 0. 9222 (Aug 6 low) followed by 0.9389 (April 12 high).
Gold - 1214
Initial support at 1190 (Aug 10 low) followed by 1157 (July 28 low). Initial resistance is now at 1218 (Aug 6 high) followed by 1218 (July 13 high).
Oil - 76.20
Initial support at 75.00 (Intraday Support) followed by 72.50 (Intraday Support). Initial resistance is now at 78.00 (Intraday Resistance) followed by 80.00 (Intraday Resistance).