U.S. Dollar Trading (USD) played into the hands of risk on/risk off throughout Wednesday trade, before gaining in late Europe which continued on into the US sessions of trade as the market views the Federal Reserve is likely to increase rates ahead of the ECB and BoE. On the data front, Trade deficit widened to $82.7 billion in April, more than double initial forecasts. US Share markets gained on Wednesday with the Dow Jones up 149 points (1.4%), the S&P 500 up 1.4% and the NASDAQ also higher by 50 points (2.1%). In data ahead, Weekly Jobless claims are forecasted to be seen at 440K slightly less than the previous 444K, whilst Fed Chairman Bernanke is scheduled to speak, investors looking for any indication on future rate policy.
The Euro (EUR) had rallied in early European session of trading as equity markets pushed higher on the back of comments by Spain Prime Minister Jose Zapatero who had announced plans to cut the nation's deficit, boosting investor sentiment. On the data front German GDP had grown by 0.2% for Q1 (Forecast: 0.0%) spilling over to EU GDP also gaining by 0.2% (Forecast: 0.1%). Industrial Production also rose for the month by 1.3% versus forecast of 1.1%. The EURUSD traded with a high of 1.2735 before falling to a low of 1.2620. Bank Holiday for Switzerland, France and Germany on Thursday.
The Japanese Yen (JPY) subdued data; ensured the Japanese Yen took direction from other markets and currencies. The USDJPY traded with a low of 92.55 and a high of 93.25.
The Sterling (GBP) was encouraged by jobs data with Unemployment falling from 4.8% to 4.7%, however BoE inflation report indicated that the start of policy normalisation still appears to be a while yet, with the statement edging towards a dovish view. The GBPUSD traded with a high of 1.5044 before falling to a low of 1.4820. UK Trade balance scheduled for release on Thursday with forecast of a deficit of 6.5 billion.
The Australian Dollar (AUD) was pressured slightly in the Asian session as Home loans fell by 3.4% for the month of March, indicating that recent RBA rate tightening may be having the desired effect. The AUD traded with a low of 0.8895 and a high of 0.8975. Update: Unemployment jumps to 5.4% for April (Previous 5.3%), Employment also rises by 33.7K jobs.
Oil & Gold (XAU) XAU traded at an all time high once again on Wednesday as it continues to find demand amongst safe haven investors amidst global uncertainty. XAU traded at an all time high of 1248.50 an ounce. Crude oil eased on Wednesday as inventories showed a rise in 1.9 million barrels in the past week. Crude fell by US$0.72 a barrel to US$75.65
Euro - 1.2640
Initial support at 1.2457 (Mar 4 low) followed by 1.2330 (October 28 2008 low). Initial resistance is now located at 1.3115 (Apr 28 low) followed by 1.3214 (May 4 high)
Yen - 93.25
Initial support is located at 88.26 (May 6 low) followed by 88.14 (April 28 low). Initial resistance is now at 94.19 (May 6 high) followed by 94.99 (May 5 high).
Pound - 1.4850
Initial support at 1.4477 (May 7 low) followed by 1.4398 (April 22, 2009 low). Initial resistance is now at 1.5148 (May 6 High) followed by 1.5265 (May 4 high).
Australian Dollar - 0.8970
Initial support at 0.8716 (Mar 6 low) followed by the 0.8579 (0.618 of 0.8578 - 0.9389). Initial resistance is now at 0.9275 (Mar 4 high) followed by 0.9325 (Apr 30 high).
Gold - 1235.70
Initial support at 1166 (Apr 30 low) followed by 1146 (Apr 27 low). Initial resistance is now at 1248.50 (May 12 high, Record High) followed by 1250 (Psychological Round number).
Oil - 75.50
Initial support at 75.56 (Intraday Support) followed by 75.00 (Intraday Support). Initial resistance is now at 80.00 (March high) followed by 82.50 (Intraday Resistance).