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

U.S. Dollar Trading (USD) traded at fresh year lows on the Dollar Index going into Europe as the EURO and AUD traded at year highs. August Industrial Output rose 0.8% vs. 0.3% forecast and CPI rose 0.4% vs. 0.3% forecast. US stocks closed at fresh year highs as market optimism continued to blossom. Crude Oil up $1.58 closing at $72.51. In US Stocks, DJIA +108 points closing at 9791, S&P +16 points closing at 1068 and NASDAQ +30 points closing at 2133. Looking ahead, Weekly Jobless Claims forecast at 555k vs. 550k previously.

The Euro (EUR) broke above 1.4700 in Early Europe on widespread USD weakness before pulling back to 1.4650 supports at the start of the US session. The market then reversed hard with Oil and broke fresh highs above 1.4740. The Upwards Trend is close to 1.48 targets from which 1.5000 will come into view. EUR/GBP continued to push higher as the Pound floundered. Overall the EUR/USD traded with a low of 1.4641 and a high of 1.4737 before closing at 1.4720. Looking ahead, July Trade Balance forecast at 5.2bn vs. 4.6bn previously.

The Japanese Yen (JPY) Strengthened at the end of the Asian session as the incoming Finance minister talked about aversion to FX intervention and the USD/JPY plummeted. The Pair recovered with the 90 Yen level intact as good US data started to finally support the Dollar. Crosses ended all higher on risk appetite. Overall the USDJPY traded with a low of 90.13 and a high of 91.37 before closing the day around 91.05 in the New York session. Looking ahead, BOJ Rate Announcement widely expected to remain at 0.1%.

The Sterling (GBP) mulled around unable to get much traction against the USD and remaining very weak against other currencies. EURGBP broke above 0.8900 and GBP/AUD broke below 1.9000. August Claimant Count at 24k as forecast. Overall the GBP/USD traded with a low of 1.6403 and a high of 1.6661 before closing the day at 1.6500 in the New York session. Looking ahead, August Retail Sales forecast at 0.1% vs. 0.4%.

The Australian Dollar (AUD) broke to fresh year highs above 0.8700 before pushing on to 0.8750 in the US session as the market continued to express risk through the Aussie. AUD/JPY sits just under the Key 80 Yen level and the market is still poised to make further gains. Overall the AUD/USD traded with a low of 0.8637 and a high of 0.8750 before closing the US session at 0.8730.

Gold (XAU) fresh year highs above $1010 an ounce led to the market extending gains hitting a high above $1020. Overall trading with a low of USD$1006 and high of USD$1020 before ending the New York session at USD$1016 an ounce.

TECHNICAL COMMENTARY


Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4467

1.4516

1.4715

1.4737

1.4768

USD/JPY

89.71

90.00

91.00

91.64

92.60

GBP/USD

1.6237

1.6326

1.6470

1.6742

1.6831

AUD/USD

0.8379

0.8507

0.8730

0.8813

0.8951

XAU/USD

974.00

982.00

1016.00

1032.00

1050.00



Euro - 1.4715
Initial support at 1.4516 (Sept 16 low) followed by 1.4467 (Sept 9 low). Initial resistance is now located at 1.4737 (Sept 16 high) followed by 1.4768 (Sept 25 2008 high)

Yen - 91.00
Initial support is located at 90.00 (Big Figure) followed by 89.71 (February 11 low). Initial resistance is now at 91.64 (Sept 15 high) followed by 92.60 (Sept 9 high).

Pound - 1.6470
Initial support at 1.6326 (Sept 8 low) followed by 1.6237 (Sept 3 low). Initial resistance is now at 1.6742 (Sept 11 high) followed by 1.6831 (Aug 7 high).

Australian Dollar - 0.8730
Initial support at 0.8379 (Sept 7 low) followed by the 0.8507 (Sept 4 low). Initial resistance is now at 0.8813 (Aug 22 2008 high) followed by 0.8951 (AUG 11 2008 high).

Gold - 1016
Initial support at 982 (Sept 10 low) followed by 974 (Sept 3 low). Initial resistance is now at 1032 (Mar 17' 2008 high) followed by 1050 (Psychological Figure).