Sentiment Weak Again as US Jobs Disappoint
Written by Anthony Darvall
U.S. Dollar Trading (USD) risk aversion spiked on the back of weak US data. Weekly Jobless Claims were 500k vs. 476k forecast for the highest reading this year. Also surprising, August Philly FED fell to -7.7 vs. 5.1 previously. In US stocks, DJIA -144 points closing at 10271, S&P -18 points closing at 1075 and NASDAQ -36 points closing at 2178. Looking ahead, July Canada CPI is forecast at 1.8% vs. 1.7% previously y/y.
The Euro (EUR) rallied above 1.2900 in the European session briefly on the back of weak US jobs numbers but was unable to maintain the rally and fell heavily on the back on EUR/JPY sales after US stocks plunged at the open. German PPI was up 0.5% vs. 0.1% forecast m/m. EUR/USD traded with a low of 1.2771 and a high of 1.2904 before closing at 1.2820.
The Japanese Yen (JPY) was sold in Asia as USD/JPY pushed towards Y86 on hopes that the BOJ may hold an emergency meeting to talk about the strong Yen. When this failed to eventuate and US data came in weak and the market pushed lower once again and tested Y85. Crosses were very heavy with AUD/JPY falling over sharply in the US session. Overall the USDJPY traded with a low of 84.89 and a high of 85.93 before closing the day around 85.30 in the New York session.
The Sterling (GBP) found support and rallied in the European session helped by very strong retail sales figures. July Retail Sales surge 1.1% vs. 0.4% forecast. Resistance and then selling emerged later as sentiment turned sour but EUR/GBP was able to hold most of its move lower. Overall the GBP/USD traded with a low of 1.5507 and a high of 1.5674 before closing the day at 1.5580 in the New York session.
The Australian Dollar (AUD) was sold after rallying in Europe on the drop in stocks during the US session and heavy AUD/JPY sales. Traders are slightly cautious ahead of the weekend's election with the chance of a hung parliament. Overall the AUD/USD traded with a low of 0.8888 and a high of 0.9020 before closing the US session at 0.8920.
Oil & Gold (XAU) was very contained above $1230 testing day highs in the US session. Overall trading with a low of USD$1227 and high of USD $1237 before ending the New York session at USD$1232 an ounce. Crude Oil fell after the weak US manufacturing data. WTI Oil Closed -$0.99 at $74.43 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
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 - 85.30
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 - 0.8920
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 - 1232
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 - 74.70
Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 77.00 (Intraday Resistance).