Stock Markets Under Pressure -- Risk Off

U.S. Dollar Trading (USD) with the US away on Holiday today the market took most of its cue from Europe which traded with a heavy tone. With the weak sentiment still remaining from Friday's Non Farm Jobs Report the market will be looking to today's ISM Services number for more information about the state of the US economy. In US stocks, DJIA -46 points closing at 9686, S&P -4 points closing at 1022 and NASDAQ -9 points closing at 2091. Looking ahead, June ISM Services forecast at 55.1 vs. 55.4.

The Euro (EUR) pared back some of the Friday's gains on subdued PMI data and conservative comments from ECB's Trichet. Trichet's commented over the weekend that Eurozone governments should continue with Austerity Budgets as this would induce investor confidence and lead to growth. EUR/USD traded with a low of 1.2503 and a high of 1.2560 before closing at 1.2490.

The Japanese Yen (JPY) Yen continued to be strong with the market capped at Y88 and crosses treading water waiting for further direction. The Nikkei continues to remain under pressure and the market is waiting for any comments from the Japanese government on the current trend of the yen. Overall the USDJPY traded with a low of 87.44 and a high of 88.02 before closing the day around 87.60 in the New York session.

The Sterling (GBP) came under pressure when profit taking and weak economic data emerged in Europe. June Services PMI slipped to 54.4 vs. 55.4 previously. The bullish turn for the GBP in the last week may require risk appetite to turn positive for further gains. Overall the GBP/USD traded with a low of 1.5088 and a high of 1.5201 before closing the day at 1.5090 in the New York session.

The Australian Dollar (AUD) was under pressure for most of the day as the market tracked European stocks lower and investors traded carefully ahead of today's RBA Rate announcement. AUD/JPY continued to be sold falling below Y74 and is a key driver of Aussie's short term direction. Overall the AUD/USD traded with a low of 0.8349 and a high of 0.8469 before closing the US session at 0.8360. Looking ahead, RBA Rate Announcement forecast to remain at 4.5%.

Oil & Gold (XAU) came under pressure as profit taking continued to hit the precious metals on rallies. Overall trading with a low of USD$1204 and high of USD$1215 before ending the New York session at USD$1208 an ounce. Kept falling towards the key $70 a barrel level on Global Growth Concerns and a strong USD. WTI Oil Closed -$1.10 at $71.10 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2045

1.2194

1.2490

1.2672

1.2803

USD/JPY

85.87

86.97

87.55

88.56

89.42

GBP/USD

1.4857

1.5000

1.5090

1.5242

1.5391

AUD/USD

0.8566

0.8263

0.8340

0.8566

0.8722

XAU/USD

1185.00

1196

1208

1244

1265.00

OIL/USD

69.5

70.00

71.10

72.50

75.00

Euro - 1.2490

Initial support at 1.2194 (July 1 low) followed by 1.2045 (June 11 low). Initial resistance is now located at 1.2672 (May 21 high) followed by 1.2803 (May 11 high)

Yen - 87.55

Initial support is located at 86.97 (July 1 low) followed by 85.87 (Nov 30, 2009 low). Initial resistance is now at 88.56 (July 1 high) followed by 89.42 (June 28 high).

Pound - 1.5090

Initial support at 1.5000 (Psychological level) followed by 1.4857 (Jun 25 low). Initial resistance is now at 1.5242 (38.2% retrace of 1.6878-1.4231) followed by 1.5391 (April 30 high).

Australian Dollar - 0.8340

Initial support at 0.8263 (June 9 low) followed by the 0.8067 (May 25 low). Initial resistance is now at 0. 8566 (June 30 high) followed by 0.8722 (June 29 high).

Gold - 1208

Initial support at 1196 (July 1 low) followed by 1185 (May 25 low). Initial resistance is now at 1244 (July 1 high) followed by 1265 (June 25 high).

Oil - 71.10

Initial support at 70.00 (Intraday Support) followed by 69.50 (Intraday Support). Initial resistance is now at 72.50 (Intraday Resistance) followed by 75.00 (Intraday Resistance).