Risk Taken Off the Table

U.S. Dollar Trading (USD) stock markets continued to fall in the US session with the market unable to stage a sustained rally. June US ADP Employment report spooked the market at +13k vs. +60k forecast and helped reverse a buoyant European session. In US stocks, DJIA -96 points closing at 9774, S&P -10 points closing at 1030 and NASDAQ -25 points closing at 2109. Looking ahead, Weekly Jobless Claims are forecast at 452k vs. 457k previously.

The Euro (EUR) was higher on the day as the ECB tender surprised the market with a lot less demand then forecast leading to speculation the Eurozone Banking sector was not as weak as forecast. Gains were pared back when US stocks slumped in the New York close. EUR/USD traded with a low of 1.2165 and a high of 1.2306 before closing at 1.2230. Looking ahead, German Retail Sales forecast at 0.4% vs. 1% previously.

The Japanese Yen (JPY) was extremely strong as risk aversion kept crosses lower and USD/JPY tested Y88.40 support. Traders are wary of Sub Y88 levels as when get close to levels that may prompt intervention talk from Japanese officials. Overall the USDJPY traded with a low of 88.36 and a high of 88.79 before closing the day around 88.50 in the New York session. UPDATE Q2 TANKAN SURVEY +1 vs. -4 forecast.

The Sterling (GBP) held up well under heavy stock market selling but fell from the 1.5000 level after EUR/GBP buying added to GBP weakness on the major. Sentiment and outlook is mixed with the positive effect of the Austerity budget fading and day to day tracking of the stock market resuming. Overall the GBP/USD traded with a low of 1.4930 and a high of 1.5077 before closing the day at 1.4960 in the New York session.

The Australian Dollar (AUD) rallied in Europe on the good ECB tender news but was sold off aggressively later in the day to break to fresh multi-week lows under 0.8460 support and test 0.8400 as Dow losses mounted. Overall the AUD/USD traded with a low of 0.8389 and a high of 0.8568 before closing the US session at 0.8410. UPDATE MAY RETAIL SALES at 0.2% vs. 0.6% previously.

Oil & Gold (XAU) was range bound as safe haven demand was countered by a strong USD. Overall trading with a low of USD$1234 and high of USD$1248 before ending the New York session at USD$1240 an ounce. Oil came under pressure as investor sentiment continued to sour. WTI Oil Closed -$0.31 at $75.63 a barrel.

TECHNICAL COMMENTARY

Currency
Sup 2
Sup 1
Spot
Res 1
Res 2

EUR/USD
1.1877
1.2045
1.2240
1.2397
1.2487

USD/JPY
87.37
87.95
88.45
89.42
89.98

GBP/USD
1.4646
1.4803
1.4970
1.5219
1.5391

AUD/USD
0.8263
0.8427
0.8430
0.8722
0.8865

XAU/USD
1215.00
1224
1240
1265
1300.00

OIL/USD
72.5
75.00
75.50
78.00
80.00

Euro - 1.2240

Initial support at 1.2045 (June 23 low) followed by 1.1877 (June 7 low). Initial resistance is now located at 1.2397 (June 28 high) followed by 1.2487 (June 21 high)

Yen - 88.45

Initial support is located at 87.95 (May 6 low) followed by 87.37 (Dec 9 low). Initial resistance is now at 89.42 (June 28 high) followed by 89.98 (June 24 high).

Pound - 1.4970

Initial support at 1.4803 (Jun 23 low) followed by 1.4646 (Jun 17 low). Initial resistance is now at 1.5219 (76.4% 0f 1.5524-1.4231) followed by 1.5391 (April 30 high).

Australian Dollar - 0.8430

Initial support at 0.8427 (June 11 low) followed by the 0.8262 (June 9 low). Initial resistance is now at 0. 8722 (June 29 high) followed by 0.8865 (May 17 high).

Gold - 1240

Initial support at 1224 (June 23 low) followed by 1215 (June 10 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (Round Number).

Oil - 75.50

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).