Markets Remain Near Highs in Quiet Trade

U.S. Dollar Trading (USD) mixed data and the lack of major news to move the markets saw consolidation of the recent rally and range trading for most of the day. May Housing Starts sank to 593k vs. 672k previously. May Industrial Output gained 1.2% vs. 0.9% forecast. In US stocks, DJIA +4 points closing at 10409, S&P -1 points closing at 1114 and NASDAQ +1 points closing at 2306. Looking ahead, Weekly Jobless Claims are forecast at 450k vs. 456k previously. Also, May CPI forecast at -0.2% vs. -0,1% previously.

The Euro (EUR) was well supported on dips as concerns about Spain was countered by persistent short covering and stable stocks. May Inflation was at expectations at 1.6% y/y. ECB's Juncker stated that 'no indication that Spain needs a financial bailout despite press reports'. EUR/USD traded with a low of 1.2253 and a high of 1.2355 before closing at 1.2280. Looking ahead, Swiss Libor Rate forecast to remain at 0.25%.

The Japanese Yen (JPY) strengthened into the European session after USD/JPY found resistance at 91.80 and fell back to Y91.10. Crosses are providing more movement and are tracking the ebbs and flows in the stock markets. Overall the USDJPY traded with a low of 91.06 and a high of 91.72 before closing the day around 91.40 in the New York session. Update June Tankan DI 9 vs. 4 previously.

The Sterling (GBP) traded above 1.4840 before sliding into the end of the US session on a combination of bearish news. BP canceled dividends for the rest of the year and BOE King was cautious as always in a speech supports new UK government measure on financial regulation. On a positive note, May UK Claimant Count fell 31k in May vs. forecasts of 20k. Overall the GBP/USD traded with a low of 1.4703 and a high of 1.4859 before closing the day at 1.4730 in the New York session. Looking ahead, May Retail Sales are forecast at 0.1% vs. 0.3% previously.

The Australian Dollar (AUD) consolidated the gains from Tuesday closing above 0.8600 but failing to pass resistance at 0.8665. AUD/JPY struggled to make fresh gains as well as USD/JPY stutters and will need fresh news to break above the key Y80 level. Overall the AUD/USD traded with a low of 0.8580 and a high of 0.8676 before closing the US session at 0.8620.

Oil & Gold (XAU) little action on gold overnight keeping to within a $10 an ounce range. Overall trading with a low of USD$1216 and high of USD$1238 before ending the New York session at USD$1233 an ounce. Maintained recent strength extending the rally slightly higher. WTI Oil Closed +$0.73 at $77.67 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2045

1.2168

1.2310

1.2368

1.2453

USD/JPY

89.81

90.84

91.25

92.12

92.97

GBP/USD

1.4347

1.4505

1.4690

1.4856

1.4918

AUD/USD

0.8427

0.8506

0.8595

0.8728

0.8865

XAU/USD

1197.00

1211

1233

1252

1261.00

OIL/USD

72.5

75.00

77.80

78.00

80.00

Euro - 1.2310

Initial support at 1.2168 (June 15 low) followed by 1.2045 (June 11 low). Initial resistance is now located at 1.2368 (0.618 of 1.2672-1.1877) followed by 1.2453 (May 28 high)

Yen - 91.25

Initial support is located at 90.84 (June 11 low) followed by 90.54 (June 1 low). Initial resistance is now at 92.12 (June 14 high) followed by 92.97 (May 18 high).

Pound - 1.4690

Initial support at 1.4506 (Jun 11 low) followed by 1.4347 (Jun 11 low). Initial resistance is now at 1.4856 (June 16 high) followed by 1.4918 (May 13 high).

Australian Dollar - 0.8595

Initial support at 0.8506 (June 15 low) followed by the 0.8427 (June 10 low). Initial resistance is now at 0. 8728 (0.505 retrace of 0.9388 - 0.8068) followed by 0.8865 (May 17 high).

Gold - 1233

Initial support at 1211 (June 7 low) followed by 1197 (June 4 low). Initial resistance is now at 1252 (Jun 8 high) followed by 1261 (1123.90 plus 1.618 of 1085.3-1170.1).

Oil - 77.80

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).