CURRENCY TRADING SUMMARY - 7th September (00:30GMT)

U.S. Dollar Trading (USD) was volatile as usual for a non farm payroll event but immediate strength after the release of the Unemployment data was reversed as US stocks turned higher from the open. Risk was put back on and the USD/JPY managed to hold above 93 Yen. August Non Farm Payrolls at -216k vs. -225k forecast with an Unemployment Rate at 9.7% vs. 9.5% forecast. Crude Oil was up $0.06 to close at $68.07. In US share markets, S&P ended +13 points (1.31%) at 1016, NASDAQ ended +35 points (1.79%) at 2018 and DOW JONES ended +96 points (1.03%) at 9441. Looking ahead, Holiday in the US today.

The Euro (EUR) tested 1.4200 before bouncing above 1.4300 in a bullish reversal as EUR/JPY buying led the Euro higher. The market is still contained within the recent ranges but the market has been selling rallies which give the preference of buying dips for an eventual breakout on the topside. Overall the EUR/USD traded with a low of 1.4190 and a high of 1.4327 before closing at 1.4311. Looking ahead, July German industrial Orders forecast at 2% vs. 4.5% previously.

The Japanese Yen (JPY) was sold in the US session as the market found itself quite long the Yen after days of buying. USD/JPY led the charge higher but AUD/JPY provided strong support. The markets preference to sell USD/JPY on rallies along with the crosses will be tested this week. Helping the mood was news from China that bank controls will not be implemented this year. Overall the USDJPY traded with a low of 92.30 and a high of 93.26 before closing the day around 92.99 in the New York session.

The Sterling (GBP) followed the Euro gyrations lower than higher but enjoyed support from improved risk appetite. 1.6400 proved solid resistance but the pullback into the weekend was very shallow. GBP/JPY traded above 152 Yen as the recovery extended from the key 150 earlier in the week. Overall the GBP/USD traded with a low of 1.6288 and a high of 1.6410 before closing the day at 1.6395 in the New York session.

The Australian Dollar (AUD) broke out of a 3 month range between 0.8480 and 0.8180 on the topside as the Aussie surged back into favor. AUD/JPY continued to recover and could test the critical 80 Yen level. Positive China news and strong Gold prices led to a strong undercurrent of support on dips. Overall the AUD/USD traded with a low of 0.8380 and a high of 0.8535 before closing the US session at 0.8306. Looking ahead, NAB Business Confidence previously at 10.

Gold (XAU) pulled back from the high $990's and did not challenge the $1000 level. Overall trading with a low of USD$985 and high of USD$997 before ending the New York session at USD$992 an ounce.

TECHNICAL COMMENTARY


Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4046

1.4178

1.4325

1.4406

1.4447

USD/JPY

90.54

91.74

93.15

94.07

95.06

GBP/USD

1.6034

1.6114

1.6405

1.6413

1.6546

AUD/USD

0.8156

0.8239

0.8530

0.8694

0.8813

XAU/USD

939.00

944.00

992.00

997.00

1000.00


Euro - 1.4325
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 - 93.15
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 - 1.6405
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 - 0.8530
Initial support at 0.8239 (AUG 27 low) followed by the 0.8156 (AUG 17 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).

Gold - 992
Initial support at 944 (Aug 31 low) followed by 939 (Aug 24 low). Initial resistance is now at 997 (Sept 3 high) followed by 1000 (Psychological Round Number).