Euro Still Struggling

U.S. Dollar Trading (USD) risk was on in Asia before the fizzling in the US session on subdued job numbers. May ADP private employment was at 55k vs 60k forecast and Weekly Jobless Claims were at 453k vs. 450k forecast. In US stocks, DJIA +5 points closing at 10255, S&P +4 points closing at 1102 and NASDAQ +21 points closing at 2303. Looking ahead, May Nonfarm Payrolls is forecast at 513k vs. 290k previously. Also released, May Unemployment Rate is forecast at 9.8% vs. 9.9%.

The Euro (EUR) enjoyed a relief rally in Asia to above 1.2300 before the European's once again focused the market on the downside risks. Heavy EUR/CHF selling added weight to the major falling back towards the key 1.4000 level. April Retail Sales at -1.2% vs. 0.2% forecast. EUR/USD traded with a low of 1.2152 and a high of 1.2328 before closing at 1.2170. Looking ahead, Q1 GDP forecast at 0.2%.

The Japanese Yen (JPY) weakness on the Yen continued with the USD/JPY pushing into the higher Y92 region after the FinMin Kan became the front runner to be the next Japanese PM and the market expect's his preference of a weaker Yen to hurt the currency. Overall the USDJPY traded with a low of 92.02 and a high of 92.83 before closing the day around 92.55 in the New York session.

The Sterling (GBP) failed above 1.4700 once again and pulled back with the Euro to low 1.46 supports before stabilizing. EUR/GBP rallied to resistance to at 0.8380 in the Asian session before resuming its downtrend. Overall the GBP/USD traded with a low of 1.4584 and a high of 1.4746 before closing the day at 1.4665 in the New York session. Looking ahead, Halifax HPI previously at -0.1% m/m.

The Australian Dollar (AUD) was buoyed in Asia by strong risk appetite and a 3% rally in the Nikkei but was not immune to the softening in the US session and fell back from above 0.8500 to test support under 0.8400. AUD/JPY is continuing to provide a lot of the direction as the recovery provides support on dips. April's Trade balance beat forecast at +132m vs. -500m previously. Overall the AUD/USD traded with a low of 0.8362 and a high of 0.8525 before closing the US session at 0.8440.

Oil & Gold (XAU) Gold was sold off after failing to break resistance at $1229. Overall trading with a low of USD$1200 and high of USD$1225 before ending the New York session at USD$1205 an ounce. Oil continued to rebound after drop in US inventories. WTI Oil Closed $1.75 at $74.61 a barrel.

TECHNICAL COMMENTARY

       

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2000

1.2110

1.2170

1.2453

1.2587

USD/JPY

89.81

90.61

92.70

92.97

93.64

GBP/USD

1.4231

1.4366

1.4640

1.4878

1.4918

AUD/USD

0.8067

0.8202

0.8440

0.8552

0.8579

XAU/USD

1185.00

1202

1205

1229

1250.00

OIL/USD

70.00

72.50

74.30

75.00

76.00

Euro - 1.2170

Initial support at 1.2110 (June 1 low) followed by 1.2000 (Round Number). Initial resistance is now located at 1.2453 (May 28 high) followed by 1.2587 (May 24 high)

Yen - 92.70

Initial support is located at 90.61 (May 28 low) followed by 89.81 (May 27 low). Initial resistance is now at 92.97 (May 18 low) followed by 93.64 (May 13 high).

Pound - 1.4640

Initial support at 1.4366 (Mary 27 low) followed by 1.4231 (May 20 low). Initial resistance is now at 1.4878 (50% 0f 1.5544-1.4231) followed by 1.4918 (May 13 high).

Australian Dollar - 0.8440

Initial support at 0.8202 (May 27 low) followed by the 0.8067 (May 25 low). Initial resistance is now at 0. 8552 (May 28 low) followed by 0.8579 (Feb 5 low).

Gold - 1205

Initial support at 1202 (May 28 low) followed by 1185 (May 25 low). Initial resistance is now at 1229 (Key level) followed by 1250 (1123.90 plus 1.618 of 1085.3-1170.1).

Oil - 74.30

Initial support at 72.50 (Intraday Support) followed by 70.00 (Intraday Support). Initial resistance is now at 72.50 (Intraday Resistance) followed by 75.00 (Intraday Resistance).