CURRENCY TRADING SUMMARY - 17th August (00:30GMT)
U.S. Dollar Trading (USD) strengthened into the weekend on fresh risk aversion caused by heavy losses on Chinese stocks and a sharp drop in US consumer confidence to 63.2 vs. 68.5 expected in August. Also helping the dollar were heavy losses in the in commodity markets led by Oil down over $3. Crude Oil Closed down $3.01 at $67.51. In US share markets, S&P ended -8.64 points (-0.85%) at 1004, NASDAQ ended -23 points (-1.19%) at 2009 and DOW JONES ended -76 points (-0.82%) at 9321. Looking ahead, TIC long terms Purchases forecast at 17.7bn vs. -10.6bn previously.
The Euro (EUR) fell from the 1.4300 level as optimism faded in Asia and the heavy tone continued into the US session. EU CPI at -0.7% y/y in July. The US confidence survey surprise led to more selling and 1.4200 broke to test 1.4160 supports into the weekend. EUR/JPY selling intensified with the break below 135. Overall the EUR/USD traded with a low of 1.4160 and a high of 1.4307 before closing at 1.4200 Looking ahead, June Trade Balance EU forecast at 1.4bn vs. 0.8bn.
The Japanese Yen (JPY) continued to strengthen on risk aversion and talk Huge US treasury coupons weighing on the USD/JPY. 95 Yen held for a while but broke going into Europe with the pair slipped to 94.50 supports. The selling intensified on the crosses with weakness in the majors pushing EUR/JPY and AUD/JPY significantly lower. Overall the USDJPY traded with a low of 94.42 and a high of 95.38 before closing the day around 94.80 in the New York session. UPDATE Q2 GDP at +0.9% vs. -3.8% previously.
The Sterling (GBP) tested 1.6600 and 1.6500 before finishing at 1.6520 in a largely contained day for the GBP. GBP/JPY selling was noted but the Pound held up well compared to other risk currencies and gained on many crosses. Overall the GBP/USD traded with a low of 1.6485 and a high of 1.6609 before closing the day at 1.6520 in the New York session. UPDATE August Rightmove HPI at -2.2% previously.
The Australian Dollar (AUD) had an extremely volatile day with fresh year highs at 0.8480 on the back of a very hawkish RBA Governor Stevens speech in which he hinted rates would rise very quickly once the emergency situation has passed. Profit taking turned into a rout on risk aversion and weak US stocks. AUD/JPY led the way down off over 3%. Overall the AUD/USD traded with a low of 0.8275 and a high of 0.8480 before closing the US session at 0.8310.
Gold (XAU) found resistance at 960 before falling heavily with Oil. Overall trading with a low of USD$943 and high of USD$960 before ending the New York session at USD$948 an ounce.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4180
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 - 94.60
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 - 1.6480
Initial support at 1.6392 (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 - 0.8280
Initial support at 0.8181 (AUG 12 low) followed by the 0.8121 (July 29 low). Initial resistance is now at 0.8519 (Aug Sept high) followed by 0.8519 (Sept 22 low).
Gold - 946
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).