CURRENCY TRADING SUMMARY - 9th September (00:30GMT)
U.S. Dollar Trading (USD) suffered broad based weakness as the biggest FX pair the EUR/USD broke out the recent range to the topside. The catalyst was seen to be Gold breaking above the key psychological level of $1000 an ounce and a UN Trade report suggesting the replacement of the USD as the global reserve currency. July Consumer Credit forecast at -4bn came in at a record -21.6Bn as consumer paid pack credit at a record pace. Crude Oil up $3.08 closing at $71.10. In US Stocks, DJIA +56 points closing at 9497, S&P +9 points closing at 1025 and NASDAQ +19 points closing at 2037. Looking ahead, FED Beige Book released.
The Euro (EUR) as stated above the Euro broke higher against the dollar with the key 1.4450 level giving way and 1.4500 quickly following. Gold and Soaring Oil combined with strong global stocks to underpin the move higher. German July Industrial Output fell unexpectedly by -0.9% vs. 1.5% forecast. Overall the EUR/USD traded with a low of 1.4329 and a high of 1.4535 before closing at 1.4490. Looking ahead, August German Core CPI forecast at 0.25 vs. 0.0% previously.
The Japanese Yen (JPY) was generally weak against most currencies as risk appetite notched higher but the losses were contained by a very weak USD/JPY which slipped on Dollar weakness towards the 92.00 Yen supports. The level held firm and the pair managed a small bounce into the US close. The downtrend in USD/JPY continues to pressure the crosses making trading extremely choppy. Overall the USDJPY traded with a low of 92.04 and a high of 92.99 before closing the day around 92.30 in the New York session. Looking ahead, July Leading Indicators previously at 2.9.
The Sterling (GBP) was extremely strong as the market broke through 1.6450, 1.6500 and tested close to 1.6600 before pulling back and consolidating the move higher. July Industrial output at 0.5% vs. 0.2% forecast and Manufacturing Production at 0.9% vs. 0.3% forecast helped the rally gain traction. EUR/GBP continued to edge higher as the Euro outpaced gains in the Pound. Overall the GBP/USD traded with a low of 1.6323 and a high of 1.6588 before closing the day at 1.6500 in the New York session. Looking ahead, July Trade Balance forecast at -6.3bn vs. -6.45bn previously.
The Australian Dollar (AUD) took the cue of Gold breaking higher from the start of Europe to trade above 0.8600 and close above the level. August NAB business Confidence climbed to 18 from 10 previously the highest level in 6 years. Overall the AUD/USD traded with a low of 0.8529 and a high of 0.8658 before closing the US session at 0.8620. Looking ahead, July Retail Sales forecast at 0.5% vs. -1.4% previously.
Gold (XAU) broke above $1000 for only the third time in history before profit taking pushed the precious metal back below the key Psychological level. Overall trading with a low of USD$992 and high of USD$1007 before ending the New York session at USD$996 an ounce.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4485
Initial support at 1.4287 (Sept 7 low) followed by 1.4178 (Sept 1 low). Initial resistance is now located at 1.4621 (61.8% retrace 1.6038 - 1.2330) followed by 1.4719 (Dec 18 high)
Yen - 92.35
Initial support is located at 91.74 (July 13 low) followed by 90.54 (February 13 low). Initial resistance is now at 94.07 (August 28 high) followed by 95.06 (Aug 14 high).
Pound - 1.6485
Initial support at 1.6237 (Sept 3 low) followed by 1.6114 (Sept 1 low). Initial resistance is now at 1.6665 (Aug 13 high) followed by 1.6831 (Aug 7 high).
Australian Dollar - 0.8615
Initial support at 0.8379 (Sept 4 low) followed by the 0.8239 (AUG 27 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).
Gold - 996
Initial support at 944 (Aug 31 low) followed by 939 (Aug 24 low). Initial resistance is now at 1032 (Mar 17' 2008 high) followed by 1050 (Psychological Round Number).