Risk Appetite Faltering

CURRENCY TRADING SUMMARY - 16th August (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) had a good day striving in the risk off environment. USD/JPY short covering and more Eurozone concerns helped push the Dollar to day highs. July Retail Sales was Slightly weaker at 0.4% vs. 0.5% forecast and US CPI increased 0.3%. In US stocks, DJIA -16 points closing at 10317, S&P -4 points closing at 1079 and NASDAQ -16 points closing at 2173. Looking ahead, NY FED Manufacturing is forecast at 8 vs. 5 previously.

The Euro (EUR) was unable to sustain gains after some surprisingly strong German Q2 GDP at 2.2% vs. 1.3% forecast. The market then eased as US stocks came under pressure and Q2 EU GDP showed the rest of the union doing worse than Germany. EUR/USD traded with a low of 1.2753 and a high of 1.2906 before closing at 1.2755. Looking ahead, July Inflation is forecast at -0.4% vs. 0.0%.

The Japanese Yen (JPY) pushed higher once again as Japanese government chatter about the strength of the Yen intensified and talk the BOJ was rate checking helped encourage short covering. EUR/JPY failed above Y110 and the market is still looking to test the BOJ/MOF's resolve. Overall the USDJPY traded with a low of 85.58 and a high of 86.28 before closing the day around 86.39 in the New York session.

The Sterling (GBP) the sentiment towards the Pound continued to sour and a rally in Asia sold to fresh week lows. EUR/GBP continued to test lows though as the Euro is relatively worse hit from the USD strength. Overall the GBP/USD traded with a low of 1.5572 and a high of 1.5680 before closing the day at 1.5590 in the New York session.

The Australian Dollar (AUD) did well as USD/JPY rallied in Asia jumping up above 0.9000 before weakness in US stocks sent the pair back to week lows at 0.8920 supports. The risk sensitive currency will continue to follow the stocks markets over coming weeks with a slight downside bias currently. Overall the AUD/USD traded with a low of 0.8928 and a high of 0.9035 before closing the US session at 0.8930.

 Update Oil & Gold (XAU) was well supported holding above $1210 the whole day. Overall trading with a low of USD$1211 and high of USD $1217 before ending the New York session at USD$1214 an ounce. Oil struggled as stock markets remained under pressure. WTI Oil Closed -$0.35 at $75.39 a barrel.

TECHNICAL COMMENTARY

CurrencySup 2Sup 1SpotRes 1Res 2
EUR/USD1.25231.27371.27501.30741.3334
USD/JPY83.5084.7085.7586.6688.12
GBP/USD1.51251.54001.55451.57131.5999
AUD/USD0.85080.87380.88700.90000.9389
XAU/USD1157.001190121712181244.00
OIL/USD72.507575.757880.00

 

Euro - 1.2750

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 - 85.75

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 - 1.5545

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 - 0.8870

Initial support at 0.8738 (July 22 high) followed by the 0.8508 (61.8% retrace of 0.8067-0.9222). Initial resistance is now at 0. 9000 (Psychological Figure) followed by 0.9222 (Aug 6 high).

Gold - 1217

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 - 75.75

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).