Markets Searching for Support
U.S. Dollar Trading (USD) weak Asian stocks (Nikkei -4% at one point) kept risk off for most of the day with a mild recovery being sold into and the equity markets closing near day lows. April Consumer Credit was solid at +1bn vs. 0.5bn previously. Keeping sentiment low was news the US Financial Crisis Commission had issued subpoenas for Goldman Sachs. In US stocks, DJIA -115 points closing at 9816, S&P -14 points closing at 1050 and NASDAQ -45 points closing at 2173. Looking ahead, Fed Chairman Bernanke Speaks.
The Euro (EUR) the pressure continued on Monday with the EUR/USD breaking below 1.19 in Asia before staging a relief rally. The Market stalled just below the now key 1.2000 level and fell back once more with US stocks ending weaker. German Factory Orders surprised at 2.8% vs. -0.1% forecast. EUR/USD traded with a low of 1.1876 and a high of 1.1993 before closing at 1.1920. Looking ahead, April German Trade Balance forecast at 14bn vs. 13.3bn previously.
The Japanese Yen (JPY) was stronger is the risk averse environment falling back to Y91 on the major and fresh year lows on the EUR/JPY near Y108. In Europe the markets staged a relief rally and this helped USD/JPY back to Y92 and EUR/JPY tested briefly above Y110. Focus on PM Kan's Cabinet and policy direction will affect the Yen today in Asia. Overall the USDJPY traded with a low of 90.96 and a high of 92.10 before closing the day around 91.59 in the New York session. Looking ahead, April Leading Indicators previously at 4.4%.
The Sterling (GBP) was beholden to market sentiment off in Asia before rebounding in the Europe above 1.4500. The market then eased back for the rest of the day as US stocks turned negative. EUR/GBP pushed up towards 0.8300 before resuming its downtrend and hitting fresh year lows just above 0.8200. Overall the GBP/USD traded with a low of 1.4387 and a high of 1.4566 before closing the day at 1.4480 in the New York session.
The Australian Dollar (AUD) tested 0.8100 after falling heavily at the start of the week on AUD/JPY selling but was able to bounce back above the 0.8200 as the Euro recovered in Europe. The weakness in US stocks towards the close pushed the Aussie back down to day lows under 0.8100 and weakness in commodities excluding gold is keeping the key 0.8000 level in focus. Overall the AUD/USD traded with a low of 0.8081 and a high of 0.8217 before closing the US session at 0.8110. Looking ahead, May Business Confidence previously at 13.
Oil & Gold (XAU) pushed towards record highs as the European turmoil added demand for the safe haven asset. Overall trading with a low of USD$1210 and high of USD$1245 before ending the New York session at USD$1240 an ounce. Oil was mixed finishing flat after testing $70 a barrel. WTI Oil Closed -$0.07 at $71.44 a barrel.
Euro - 1.1930
Initial support at 1.1827 (March 2006 low) followed by 1.1640 (Nov 2005 low). Initial resistance is now located at 1.2453 (May 28 high) followed by 1.2587 (May 24 high)
Yen - 91.60
Initial support is located at 90.54 (June 1 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 - 1.4480
Initial support at 1.4393 (Jun 7 low) followed by 1.4366 (May 27 low). Initial resistance is now at 1.4771 (June 2 high) followed by 1.4878 (50% 0f 1.5544-1.4231).
Australian Dollar - 0.8130
Initial support at 0.8067 (May 25 low) followed by the 0.8000 (Big Figure). Initial resistance is now at 0. 8552 (May 28 low) followed by 0.8579 (Feb 5 low).
Gold - 1240
Initial support at 1202 (May 28 low) followed by 1185 (May 25 low). Initial resistance is now at 1250 (May 14 high) followed by 1261 (1123.90 plus 1.618 of 1085.3-1170.1).
Oil - 71.50
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).