CURRENCY TRADING SUMMARY - 14th August (00:30GMT)
U.S. Dollar Trading (USD) came under pressure as the outlook changed dramatically on weaker than expected Retail Sales and strong EU GDP in an environment of strong risk appetite. The Dollar fell back into the old correlation of stocks up and Dollar down. July Retail Sales dropped -0.1% vs. 0.8% forecast. Crude Oil Closed up $0.36 at $70.52. In US share markets, S&P ended +6.92 points (0.69%) at 1012, NASDAQ ended +10 points (0.53%) at 2009 and DOW JONES ended +36 points (+0.4%) at 9398. Looking ahead, August UoM Consumer Sentiment forecast at 68.5 vs. 66 previously. July US CPI forecast at 0.0% m/m.
The Euro (EUR) broke past 1.4250 resistance on the back of German and French GDP which was surprisingly strong at +0.3% each vs. -0.2% forecast. The USD bulls gave in and the pair surged to the old resistance at 1.4330 before paring back on US Retail sales figures to finish just below the figure. Overall the EUR/USD traded with a low of 1.4210 and a high of 1.4327 before closing at 1.4280. Looking ahead, July EU CPI forecast at -0.6% y/y.
The Japanese Yen (JPY) was sold as Equity markets around the world rebounded and crosses led by EUR/JPY soared higher. The Market quickly pared back gains after US retail Sales came in poor with USD/JPY dropping 1 big figure. Overall the USDJPY traded with a low of 95.05 and a high of 96.49 before closing the day around 95.40 in the New York session.
The Sterling (GBP) was strong on the back of Euro gains breaking above 1.6600 before paring back on GBP/JPY selling after the US data. The Outlook it turning more positive after the major selling seen last week on the back of the BoE's QE program as the market focuses on record Stock market gains. Overall the GBP/USD traded with a low of 1.6486 and a high of 1.6667 before closing the day at 1.6580 in the New York session.
The Australian Dollar (AUD) continued to be buoyed by the fantastic reversal over the last two days with risk appetite soaring after a dip on Wednesday. RBA Governor Stevens will speak before parliament and will focus on Government bank guarantees and Interest rates. The risk for interest rate hikes as soon as December are one of the reasons the Australia Dollar is so well supported. Overall the AUD/USD traded with a low of 0.8330 and a high of 0.8454 before closing the US session at 0.8420.
Gold (XAU) broke back above $950 in early Asia and tested $960 on USD weakness later in the day. Overall trading with a low of USD$949 and high of USD$961 before ending the New York session at USD$958 an ounce.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4300
Initial support at 1.4008 (July 29 low) followed by 1.3833 (Jul 8 low). Initial resistance is now located at 1.4447 (Aug 5 high) followed by 1.4621 (61.8% retrace of 1.6038 -1.2330)
Yen - 95.30
Initial support is located at 94.37 (Aug 4 low) followed by 94.02 (July 29 low). Initial resistance is now at 97.79 (August 7 high) followed by 98.89 (June 4 high).
Pound - 1.6595
Initial support at 1.6311 (Jun 22 low) followed by 1.6266 (Jul 17 low). Initial resistance is now at 1.6719 (AUG 10 high) followed by 1.6831 (AUG 7 high).
Australian Dollar - 0.8465
Initial support at 0.8181 (AUG 12 low) followed by the 0.8121 (July 29 low). Initial resistance is now at 0.8471 (Aug 4 high) followed by 0.8519 (Sept 22 low).
Gold - 958
Initial support at 940 (Aug 12 low) followed by 925 (July 29 low). Initial resistance is now at 971 (August 6 high) followed by 990 (Jun 3 high).