CURRENCY TRADING SUMMARY - 10th September (00:30GMT)
U.S. Dollar Trading (USD) was able to muster a small rally in Asia heading into Europe on Asian stocks before finding sellers and heading to new year lows against against a basket of its biggest trading partners. FED beige book was cautious and helped take some steam off the US stocks which were in a positive mood for the third day. Crude Oil up $0.21 closing at $71.31. In US Stocks, DJIA +49 points closing at 9547, S&P +8 points closing at 1033 and NASDAQ +22 points closing at 2060. Looking ahead, Weekly Jobless claims forecast at 560k vs. 570k previously. Also released, July Trade Balance Forecast at -27bn unchanged from previous and the Bank of Canada Rate meeting forecast to remain at 0.25%.
The Euro (EUR) continued higher after a brief dip in Asia to register fresh year highs at 1.4600 topping out with US stocks and easing later in the day. EUR/JPY broke above 134 Yen but fell violently as the USD/JPY slumped at US open. EUR/GBP remained strong with traders selling the pound ahead of the rate announcement tonight. Overall the EUR/USD traded with a low of 1.4467 and a high of 1.4600 before closing at 1.4550.
The Japanese Yen (JPY) broke below 92 Yen at the start of the US session on continued USD weakness but found solid support at the 91.60 level before recovering on strong cross buying. Crosses are holding in a range with gains in majors been offset by the weakness in USD/JPY. Overall the USDJPY traded with a low of 91.61 and a high of 92.60 before closing the day around 92.10 in the New York session. UPDATE July Machine Orders at -9.3% vs. 9.7% previously.
The Sterling (GBP) rallied with the Euro but was capped again ahead of 1.66 as traders pared back positions ahead of today MPC rate decision. Risk appetite and general USD weakness is providing support but the pound is losing ground on many crosses as it fails to match gains. July Trade Balance forecast at -6.5bn vs. -6.3bn. Overall the GBP/USD traded with a low of 1.6456 and a high of 1.6592 before closing the day at 1.6540 in the New York session. Looking ahead, BOE Rate meeting forecast at 0.5% but attention will being given to statement accompanying the decision.
The Australian Dollar (AUD) fell from lofty highs above 0.8600 as Retail Sales missed expectations by a significant margin at -1% vs. 0.5% forecast. Support on the dip showed the strength of the commodity currency although calls for a rate rise in October are starting to be toned down. Overall the AUD/USD traded with a low of 0.8566 and a high of 0.8670 before closing the US session at 0.8620. Looking ahead, August Forecast at -12.5k vs. 32.2k previously.
Gold (XAU) tested above $1000 but once again could not sustain the level and pulled back sharply to $990 supports. Overall trading with a low of USD$987 and high of USD$1003 before ending the New York session at USD$993 an ounce.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4560
Initial support at 1.4287 (Sept 7 low) followed by 1.4178 (Sept 1 low). Initial resistance is now located at 1.4621 (61.8% retrace 1.6038 - 1.2330) followed by 1.4719 (Dec 18 high)
Yen - 92.05
Initial support is located at 91.61 (Sept 7 low) followed by 90.54 (February 13 low). Initial resistance is now at 94.07 (August 28 high) followed by 95.06 (Aug 24 high).
Pound - 1.6540
Initial support at 1.6237 (Sept 3 low) followed by 1.6114 (Sept 1 low). Initial resistance is now at 1.6665 (Aug 13 high) followed by 1.6831 (Aug 7 high).
Australian Dollar - 0.8630
Initial support at 0.8379 (Sept 4 low) followed by the 0.8239 (AUG 27 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).
Gold - 993
Initial support at 974 (Sept 3 low) followed by 944 (Aug 31 low). Initial resistance is now at 1032 (Mar 17' 2008 high) followed by 1050 (Psychological Round Number).