CURRENCY TRADING SUMMARY - 2nd September (00:30GMT)
U.S. Dollar Trading (USD) gained heavily in the US session as risk appetite took a massive shift for the worse. Very strong US August Manufacturing PMI data was overlooked at 52.9 vs. 48.9 previously. September is a traditional bear month for equities with the first day not inspiring much confidence. Crude Oil fell $1.91 to close at $68.05. In US share markets, S&P ended -22 points (-2.2%) at 998, NASDAQ ended -40 points (-2.00%) at 1968 and DOW JONES ended -185 points (-1.96%) at 9310. Looking ahead, August ADP private Employment Report forecast at -250k vs. -371k previously. Crude Oil Inventories forecast at -0.8m vs. 0.2m previously.
The Euro (EUR) bank rumors swirled in New York and the market tumbled from the relatively high levels of the recent range to test support at 1.4200. EUR/JPY is poised at key levels and could pull the major lower although a break of the lower end of the range is also unlikely with solid support expected from 1.4000-1.4100. EUR/GBP Overall the EUR/USD traded with a low of 1.4178 and a high of 1.4378 before closing at 1.4220. Looking ahead, Q2 EU GDP is fore4cast at -0.1% vs. -2.5% q/q.
The Japanese Yen (JPY) had a volatile day trading to day highs on a bounce in Asia stocks before falling back below 93 Yen in the US session as the mood darkened considerably. Supports at 92.50 and 91.50 will stem the speed on the downside decent on any major stock falls. Also adding to support on the downside verbal FX intervention comments from the Japanese government expected on any approach towards 90 Yen. Weighing on the USD/JPY is the continued heavy selling on EUR/JPY and AUD/JPY crosses. Overall the USDJPY traded with a low of 92.51 and a high of 93.44 before closing the day around 93.05 in the New York session.
The Sterling (GBP) followed the Euro although in a much more volatile fashion testing resistance at 1.6360 before crashing with US stocks to new multi-month lows below 1.6160 supports. GBP/JPY was very heavy testing 150 Yen supports. Overall the GBP/USD traded with a low of 1.6113 and a high of 1.6375 before closing the day at 1.6160 in the New York session.
The Australian Dollar (AUD) was under pressure before the risk aversion selling surfaced after the RBA kept hawkish comments to a minimum. A break in the AUD/JPY to fresh multi-month lows is the main catalyst although the continued weakness in commodities is also weighing. The long term daily rising trend-line was also broken at 0.8280 causing Bulls further headaches. Overall the AUD/USD traded with a low of 0.8244 and a high of 0.8458 before closing the US session at 0.8280. Looking ahead, Q2 GDP is forecast at 0.2% vs. 0.4% previously q/q.
Gold (XAU) held up well as the banking inspired risk aversion caused safe haven demand to compete with the stronger Dollar. Overall trading with a low of USD$946 and high of USD$957 before ending the New York session at USD$952 an ounce.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4210
Initial support at 1.4178 (Sept 1 low) followed by 1.4046 (AUG 17 low). Initial resistance is now located at 1.4407 (Aug 27 high) followed by 1.4447 (Aug 5 high)
Yen - 92.80
Initial support is located at 92.55 (Aug 31 low) followed by 91.74 (July 13 low). Initial resistance is now at 94.07 (August 28 high) followed by 95.06 (Aug 14 high).
Pound - 1.6135
Initial support at 1.6114 (Sept 1 low) followed by 1.6034 (Jul 13 low). Initial resistance is now at 1.6381 (Aug 28 high) followed by 1.6546 (Aug 24 high).
Australian Dollar - 0.8260
Initial support at 0.8245 (Sept 1 low) followed by the 0.8239 (Aug 27 low). Initial resistance is now at 0.8478 (Aug 14 high) followed by 0.8519 (Sept 22 high).
Gold - 953
Initial support at 939 (Aug 17 low) followed by 930 (July 29 low). Initial resistance is now at 961 (August 6 high) followed by 971 (Jun 3 high).