U.S. Dollar Trading (US) despite being up 2% at the open US stocks closed flat and inspired risk currencies to give up intraday gains. Gold broke above $1900 in late US trade with the market relentless from demand for safe haven investments. In US stocks on Friday, DJIA +37 points closing at 10854, S&P +1 points closing at 1123 and NASDAQ +3 points closing at 2345. Looking ahead, July Home Sales forecast at 0.31mn 0.312mn previously.
The Euro (EUR) the Euro rallied with positive sentiment in Asia and Europe even with the Gaddafi regime near toppling. The gains reversed for a relatively mild trading day into the US close. The market is awaiting more news from the US fed while the debate about Eurobonds rages on. EUR/JPY is remaining in a holding pattern as well at the Y110 level. Looking ahead, August PMI manufacturing forecast at 49.2 vs. 50.4 previously.
The Japanese Yen (JPY) after all the talk over the weekend the market did very little on Monday holding in the Y76.50-Y77 range with attempts above the figure sold back very quickly. Soft stock markets are keeping pressure on the crosses so the Yen will remain will supported for the short term. BOJ is continuing to talk about intervention but so far is holding back from physical buying.
The Sterling (GBP) pivoted the 1.6500 level tracking the ups and downs of the stock markets but was very contained with the outlook linked to Friday's Jackson hole speech from Fed's Bernanke. The lack of volatility is giving traders a breather after two weeks of extreme volatility. Looking ahead, August CBI orders forecast at -13 vs. -10 previously.
The Australian Dollar (AUD) The Aussie was under pressure early and a brief rally in Europe was sold in the US session back below 1.0400. Chinese PMI and a Speech today from RBA deputy governor Battellino will drive movement today in Asia. AUD/JPY tested Y80 but failed to hold above the key level.
Oil & Gold (XAU) Demand for the precious metal saw another fresh all time high above $1900 with pull backs meeting solid demand. Crude Oil ended higher with dips bought aggressively back toward $85 a barrel.
Pairs to watch
AUD/USD can the Chinese data provide fresh direction
XAU/USD time for profit taking?
Euro - 1.4370
Initial support at 1.4226 (Aug 15 low) followed by 1.4150 (Aug 12 low). Initial resistance is now located at 1.4452 (Aug 18 high) followed by 1.4536 (Jul 27 high)
Yen - 76.80
Initial support is located at 75.95 (Aug 19 low) followed by 75.00 (Psych level). Initial resistance is now at 77.31 (Aug 10 high) followed by 78.47 (Aug 8 high).
Pound - 1.6470
Initial support at 1.6421 (Aug 18 low) followed by 1.6256 (Aug 15 low). Initial resistance is now at 1.6592 (Aug 17 high) followed by 1.6661 (May 3 high).
Australian Dollar - 1.0405
Initial support at 1.0315 (Aug 19 low) followed by the 1.0246 (Aug 12 low). Initial resistance is now at 1.0559 (Aug 18 high) followed by 1.0786 (Aug 3 High).
Gold - 1895
Initial support at 1852 (Aug 22 low) followed by 1784 (Aug 18 low). Initial resistance is now at 1900 (Psych level) followed by 1931 (1723.70 plus 0.618 of 1478.83-1814.95).
Oil - 84.60
Initial support at 82.50 (Intraday Support) followed by 80.00 (Intraday Support). Initial resistance is now at 85.00 (Intraday resistance) followed by 87.00 (Intraday Resistance).
Written by Anthony Darvall