CURRENCY TRADING SUMMARY - 25th September (02:30 GMT)
U.S. Dollar (USD) advanced higher against the majors following weaker U.S. data and a drop in commodities prices. Jobless Claims dropped slightly to 530k while Housing Data disappointed the markets by falling 2.7% against expectation for a 2.1% increase. Wall Street drifted lower, DJIA -41.11 points closing at 9707.44, S&P -10.09 points closing at 1050.78 and NASDAQ -23.81 points closing at 2107.61. Looking ahead US Durable Goods Orders expected to have risen at a smaller rate in August after surging 5.1% in the prior month.
The Euro (EUR) tumbled after hitting the 1.48-level, as the market stated selling euros at a strong pace, breaking through a support trend-line that has been solid for the past two weeks. The German Ifo business climate rose from 90.5 to 91.3 in August versus expectation of 92.1. According to the Ifo President, Hans-Werner Sinn, appraisals of the business situation and outlook have improved. However, by far the greater number of firms still assesses the business situation as poor.
The Sterling (GBP) support from the lack of discussion among MPC members on current levels of QE and deposit rate disappeared today following BoE Governor King's comments. He reiterated that a weaker pound is 'helpful' to rebalance the UK economy towards a focus on exports. This resulted in a sharp decline in the sterling as it dove into lows against the greenback, yen, Swiss Franc and particularly the Euro.
The Japanese Yen (JPY) recovered every pip lost during the U.S. trading session, coming off 91.60 versus the greenback and trading lower towards the 90.50 level.
The Australian Dollar (AUD) traded lower from its year high just below 0.8800 versus the greenback, falling over 150 pips as stocks declined. Asian stocks dropped, the MSCI Asia Pacific Index suffered its biggest weekly decline in a month falling as much as 1.6% to 116.75 as of 03:00 GMT.
Gold (XAU) was unable to hold the 1000 support level, sliding as low as 990.80 from yesterday's high at 1018.95.
Euro - 1.4650
Initial support at 1.4611 followed by 1.4516. Initial resistance is now located at 1.4866 followed by 1.4908.
Yen - 90.72
Initial support is located at 90.13 followed by 90.00. Initial resistance is now at 92.53 followed by 93.30.
Pound - 1.5950
Initial support at 1.5870 followed by 1.5800. Initial resistance is now at 1.5980 followed by 1.6150.
Australian Dollar - 0.8650
Initial support at 0.8591 followed by the 0.8529. Initial resistance is now at 0.8814 followed by 0.8943.
Gold - 996.00
Initial support at 994.40 followed by 982.50. Initial resistance is now at 1002.90 followed by 1025.00