CURRENCY TRADING SUMMARY - 15th July (00:30GMT)
U.S. Dollar Trading (USD) continued to weaken as Global stocks rallied after Monday's rally in US stocks and Goldman Sachs 2nd Quarter results beat even optimistic forecasts and led to the continuation of strong risk appetite, albeit after a major bout of profit taking immediately after the release. US June Retails Sales at 0.6% vs. 0.4% forecast also added to the rally and strong Intel results after the bell helped give Asia a strong lead going into Wednesday. June PPI at 1.8% vs. 0.9% was very high and helps take pressure off the deflation theory. Crude Oil closed down $0.17 at $59.52 and is starting to decouple from the rest of the markets. In US share markets, S&P ended +4.79 points (+0.53%) at 905.84, NASDAQ ended +6.52 points (+0.36%) at 1799.73 and DOW JONES ended +27.81 points (+0.33%) at 8359.49. Looking ahead, June CPI is forecast at 0.6% vs. 0.1% whilst June Industrial Output is forecast at -0.6% vs. -1.1% m/m previously.
The Euro (EUR) was unable to break convincingly above 1.4000 although had multiple attempts with heavy Central Bank selling discouraging attempts higher. German July Zew Survey fell to 39.5 vs. 48.0 forecast, as Future Economic sentiment slumped. EUR/JPY support in the mid 129 Yen levels help lift the Major back towards 1.4000 into the US close. Overall the EUR/USD traded with a low of 1.3910 and a high of 1.4016 before closing at 1.3985. Looking ahead, June EU Inflation forecast at 0.2% vs. 0.1% m/m.
The Japanese Yen (JPY) was sold aggressively as the market flooded into riskier assets but crosses were volatile as the majors came under bouts of profit taking. Ended the US session as day lows as USD/JPY re-broke above 93.50 on strong Intel results. BOJ meet today the market will be looking to see if the Credit Facility offered by BOJ is extended. Overall the USDJPY traded with a low of 92.70 and a high of 93.79 before closing the day around 93.70 in the New York session. Looking ahead, BOJ rate decision and statement.
The Sterling (GBP) was very strong from the get go as economic data showed the economy was starting to improve. BRC RETAIL SALES +1.4%m/m in June vs. -0.8% previously. June CPI came in at 1.8% y/y as forecast. GBP/JPY was the big move and the pair also took advantage of the EUR/USD cap at 1.4000 to send EUR/GBP down to week lows. Overall the GBP/USD traded with a low of 1.6277 and a high of 1.6348 before closing the day at 1.6330 in the New York session. Looking ahead, ILO May Unemployment is forecast at 7.4% vs. 7.2%. June Claimant Count is forecast at 40.5K vs. 39.3K previously.
The Australian Dollar (AUD) was the strongest currency yesterday as the beaten down risk currency surged on heavy AUD/JPY buying and strong investor sentiment. Also helping lift the pair was strong Business Confidence which combines well with strong consumer confidence from last week. Ongoing issues with China/Rio are yet to make significant impact on the Aussie. Overall the AUD/USD traded with a low of 0.7812 and a high of 0.7951 before closing the US session at 0.7940.
Gold (XAU) was very well supported and ground higher without much pull back all day. Overall trading with a low of USD$918 and high of USD$928 before ending the New York session at USD$925 an ounce.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3985
Initial support at 1.3827 (Jun 22 low) followed by 1.3749 (Jun 16 low). Initial resistance is now located at 1.4071 (July 1 high) followed by 1.4201 (Jun 1 high)
Yen - 93.55
Initial support is located at 91.74 (Jul 13 low) followed by 90.52 (76.4 retrace 87.13-101.44). Initial resistance is now at 93.60 (Jul 9 high) followed by 94.89 (Jul 8 high).
Pound - 1.6330
Initial support at 1.5985 (July 8) followed by 1.5803 (Jun 8 low). Initial resistance is now at 1.6380 (Jul 9 high) followed by 1.6546 (Jul 1 high).
Australian Dollar - 0.7940
Initial support at 0.7703 (July 13 low) followed by the 0.7630 (May 19 low). Initial resistance is now at 0.8038 (July 7 high) followed by 0.8155 (Jun 30 high).
Gold - 925
Initial support at 905 (Jul 8 low) followed by 895 (May 6 low). Initial resistance is now at 934 (Jul 3 high) followed by 948 (Jun 26 high).