Markets Rangebound, Waiting for Fresh Direction

Written by Anthony Darvall

U.S. Dollar Trading (USD) was mixed once again ending slightly stronger against risk currencies as US equities failed to hold onto intraday gains. Weekly Crude Oil Inventories fell -0.8m vs. -3m previously. In US stocks, DJIA +9 points closing at 10415, S&P +1 points closing at 1093 and NASDAQ +6 points closing at 2215. Looking ahead, Weekly Jobless Claims are forecast at 476k vs. 484k previously.

The Euro (EUR) tested resistance above 1.2900 as US stocks started the day on a strong footing but the rally stalled and we ended in familiar territory in the mid 1.28 region. EUR/JPY traded above Y110 briefly but struggled to hold the key level. EUR/USD traded with a low of 1.2790 and a high of 1.2924 before closing at 1.2840. Looking ahead, German PPI is forecast at 0.1% vs. 0.6% previously.

The Japanese Yen (JPY) talk of solid semi official USD/JPY buy orders at Y85.20 kept the market well supported on dips and finished unchanged on the day. GBP/JPY buying supported but AUD/JPY was a drag on the market. Overall the USDJPY traded with a low of 85.17 and a high of 85.70 before closing the day around 85.45 in the New York session.

The Sterling (GBP) found support at the 1.5500 level before staging a solid rally on the back of the MPC minutes which once again showed one member voting for a rate hike in the UK at the last August meeting. Overall the GBP/USD traded with a low of 1.5496 and a high of 1.5691 before closing the day at 1.5575 in the New York session. Looking ahead, July Retails Sales are forecast at 0.4% vs. 0.7% m/m. Also released, August CBI Orders are forecast at -14.

The Australian Dollar (AUD) was hurt by the change in mood in the US session with weakness in some commodities and uncertainty surrounding the Australian Election on Saturday prompting a pullback. Support is seen at 0.8950 and week lows at 0.8860. Overall the AUD/USD traded with a low of 0.8956 and a high of 0.9056 before closing the US session at 0.9070.

Oil & Gold (XAU) continued to be well supported on dips with a test of $1220 failing before month highs above $1230 were seen. Overall trading with a low of USD$1217 and high of USD $1232 before ending the New York session at USD$1228 an ounce. Crude was sold after the US Oil data but was bought back into the US close. WTI Oil Closed -$0.35 at $75.42 a barrel.

TECHNICAL COMMENTARY

CurrencySup 2Sup 1SpotRes 1Res 2
EUR/USD1.25231.27371.28151.29331.3334
USD/JPY83.5084.7385.5086.6688.12
GBP/USD1.51251.54991.55751.57131.5999
AUD/USD0.87810.88600.89700.90800.9222
XAU/USD1190.001210123012441265.00
OIL/USD73.807575.307778.00

 

Euro - 1.2815

Initial support at 1.2737 (July 22 low) followed by 1.2523 (July 13 low). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3334 (August 6 high)

Yen - 85.50

Initial support is located at 84.73 (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 - 1.5575

Initial support at 1.5499 (Aug 18 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 - 0.8970

Initial support at 0.8860 (Aug 16 high) followed by the 0.8781 (38.2% retrace of 0.8067-0.9222). Initial resistance is now at 0. 9080 (August 17 high) followed by 0.9222 (Aug 6 high).

Gold - 1230

Initial support at 1210 (Aug 13 low) followed by 1190 (Aug 10 low). Initial resistance is now at 1244 (July 1 high) followed by 1265 (June 21 high).

Oil - 75.30

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).