CURRENCY TRADING SUMMARY - 15th September (00:30GMT)

U.S. Dollar Trading (USD) strengthened at the open across the board as the Nikkei slumped over 2% on concerns a trade dispute between the US and China could unravel into a trade war. Obama's speech on financial regulation was largely as expected and Fedspeak from Yellen and Lacker offered little new in terms of exit strategy. US investors shrugged off the bad lead from Asia and US stocks ended highers sending the USD to fresh year lows against the Euro. Crude Oil down $0.43 closing at $68.86. In US Stocks, DJIA +21 points closing at 9626, S&P +6 points closing at 1049 and NASDAQ +10 points closing at 2091. Looking ahead, August Core Retail Sales forecast at 0.4% vs. -0.6% previously. Also released, August PPI forecast at 0.8% vs. -0.9% previously.

The Euro (EUR) found support from Asian selling at 1.4520 and bounced hard into the US session setting fresh year highs above 1.4650. Strong US stocks and stops helped provide momentum. The Rally stalled at highs but found support in the low 1.4600 area to end well supported at the close. July Industrial production -0.3% vs. -0.2% forecast. Overall the EUR/USD traded with a low of 1.4516 and a high of 1.4653 before closing at 1.4620. Looking ahead, September German ZEW survey forecast at 60 vs. 56 previously.

The Japanese Yen (JPY) USD/JPY found support from USD strength early in the day and then continued higher as Yen Crosses rebounded from selling last week. The 90 level on the Yen remains intact and the market is very short the USD/JPY which could lead to a sharp short covering rally in US interest rate expectations change. Overall the USDJPY traded with a low of 90.21 and a high of 91.14 before closing the day around 90.90 in the New York session.

The Sterling (GBP) led the market on the way down yesterday with the market falling heavily on risk aversion and traders caught long after the rally on Thursday and Friday last week. GBP/JPY bounced off the 150 Yen level and Cable bounced off the 1.6520 supports but the recovery lagged the Euro and EUR/GBP ended the day above 0.88. Overall the GBP/USD traded with a low of 1.6622 and a high of 1.6692 before closing the day at 1.6575 in the New York session. Looking ahead, August CPI is forecast at 0.3% vs. 0.0% previously.

The Australian Dollar (AUD) crashed back through 0.8600 as the Nikkei slumped and AUD/JPY broke through support at 77.90 Yen. Support at 0.8550 support for the second time in the last week and the pair was able to recover the 0.8600 handle midway through the European session. The recent rally is stalling although the market is comfortable in the 0.8520-0.8650 range for the time being. Overall the AUD/USD traded with a low of 0.8545 and a high of 0.8637 before closing the US session at 0.8620. Looking ahead, RBA Minutes released from the September Meeting.

Gold (XAU) weakened on heavy profit taking in early Europe but was able to recover and reclaim the $1000 level which gold has been pivoting lately. Overall trading with a low of USD$993 and high of USD$1009 before ending the New York session at USD$999 an ounce.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4287

1.4467

1.4625

1.4719

1.4768

USD/JPY

89.71

90.21

90.90

92.60

93.30

GBP/USD

1.6323

1.6456

1.6575

1.6831

1.7043

AUD/USD

0.8379

0.8507

0.8615

0.8694

0.8813

XAU/USD

974.00

982.00

999.00

1011.00

1032.00


Euro - 1.4625
Initial support at 1.4467 (Sept 9 low) followed by 1.4287 (Sept 7 low). Initial resistance is now located at 1.4719 (Dec 18 high) followed by 1.4768 (Sept 25 2008 high)

Yen - 90.90
Initial support is located at 90.21 (Sep 11 low) followed by 89.71 (February 11 low). Initial resistance is now at 92.60 (Sept 9 high) followed by 93.3 (Sept 7 high).

Pound - 1.6575
Initial support at 1.6456 (Sept 9 low) followed by 1.6323 (Sept 8 low). Initial resistance is now at 1.6831 (Aug 7 high) followed by 1.7043 (Aug 5 high).

Australian Dollar - 0.8615
Initial support at 0.8507 (Sept 7 low) followed by the 0.8379 (Sept 4 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).

Gold - 999
Initial support at 982 (Sept 10 low) followed by 974 (Sep 3 low). Initial resistance is now at 1011 (Sept 11 high) followed by 1032 (Mar 17' 2008 high).