CURRENCY TRADING SUMMARY - 17th July (00:30GMT)

U.S. Dollar Trading (USD) Natural profit taking took place for most of the Asian and European session until results from JP Morgan once gain put the bulls in the driving seat. The rally failed to inspire currencies though and USD/JPY and EUR/USD failing to make substantial gains. Weekly Jobless Claims improved to 522k vs. 565K previously and help keep sentiment positive. US Philly FED fell to -7.5 vs. -2.2 previously. Crude Oil closed up $0.48 at $62.02. In US share markets, S&P ended +8.06 points (+0.86%) at 940.74, NASDAQ ended +22.13 points (+1.19%) at 1885.03 and DOW JONES ended +95.61 points (+1.11%) at 8711.82. Looking ahead, June Building Permits forecast 0.52 Mn vs. 0.518 Mn previously.

The Euro (EUR) tried multiple times to break higher but resistance was solid near the top end of the recent 2 month range. EUR/JPY responded to JP' Morgans results but found trading above 133 a little hard going with USD/JPY slipping on USD weakness. A topside failure will encourage traders to once again target the downside with 1.4000 and 1.3900 the natural targets. Overall the EUR/USD traded with a low of 1.4054 and a high of 1.4166 before closing at 1.4130. Looking ahead, May EU Trade is forecast unchanged at 2.7Bn.

The Japanese Yen (JPY) fell back through 94 Yen on heavy profit taking in Asia and failed to regain the level in the US session even as US stocks continued higher. Technicals have become very mixed and the price action suggest range trading will continue to be the dominate force in a market split about direction. Overall the USDJPY traded with a low of 93.25 and a high of 94.47 before closing the day around 94.20 in the New York session.

The Sterling (GBP) was contained to the previous days range with traders not willing to test 1.6500 without some sort of consolidation after the major rally seen already during the week. IMF issued the 2009 GDP forecast at -4.2% with 2010 seen +0.2%. Overall the GBP/USD traded with a low of 1.6354 and a high of 1.6483 before closing the day at 1.6390 in the New York session.

The Australian Dollar (AUD) broke briefly above 0.8050 resistance but topped out with the rest of the majors as traders began to take profit going into the weekend and further gains from stock markets becoming unlikely in the short term with the largest rally since march creating overbought signals across the market. Overall the AUD/USD traded with a low of 0.7958 and a high of 0.8075 before closing the US session at 0.8020. UPDATE EXPORT PRICES -20.6% in Q2 Largest in decades.

Gold (XAU) consolidated recent gains trading in a tight range. Overall trading with a low of USD$932 and high of USD$940 before ending the New York session at USD$936 an ounce.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3749

1.3833

1.4130

1.4201

1.4267

USD/JPY

91.74

92.72

93.85

94.89

95.46

GBP/USD

1.5803

1.5985

1.6390

1.6546

1.6745

AUD/USD

0.7703

0.7814

0.8030

0.8155

0.8237

XAU/USD

905.00

918.00

938.00

948.00

965.00


Euro - 1.4130
Initial support at 1.3833 (Jul 8 low) followed by 1.3749 (Jun 16 low). Initial resistance is now located at 1.4201 (July 1 high) followed by 1.4267 (Jun 5 high)

Yen - 93.85
Initial support is located at 92.72 (Jul 14 low) followed by 91.74 (July 13 low). Initial resistance is now at 94.89 (Jul 8 high) followed by 95.46 (Jul 7 high).

Pound - 1.6390
Initial support at 1.5985 (July 8) followed by 1.5803 (Jun 8 low). Initial resistance is now at 1.6546 (Jul 1 high) followed by 1.6745 (June 30 high).

Australian Dollar - 0.8030
Initial support at 0.7814 (July 14 low) followed by the 0.7703 (July 13 low). Initial resistance is now at 0.8155 (June 30 high) followed by 0.8237 (Jun 11 high).

Gold - 938
Initial support at 918 (Jul 8 low) followed by 905 (July 8 low). Initial resistance is now at 948 (June 26 high) followed by 965 (Jun 10 high).