U.S. Dollar Trading (US) risk aversion dominated the market with stocks continuing their slide unimpressed by the debt deal. Personal income and consumption growth missed in June at 0.1% vs. 0.2% forecast m/m. European Debt concerns and US growth downgrades were the main catalyst for the downside action overnight. In US stocks, DJIA -265 points closing at 11866, S&P -32 points closing at 1254 and NASDAQ -75 points closing at 2669. Looking ahead, July ADP Employment forecast at 100k vs. 157k previously. Also released, July Services ISM forecast at 53.6 vs. 53.3 previously.
The Euro (EUR) Italian debt was in focus we the yield on 10yr bonds continuing to surge higher with investors fleeing the potential next domino to fall. The US stock weakness added EUR/CHF and EUR/JPY pressure and the major slipped towards 1.4150. The EUR/USD traded with a low of 1.4150 and a high of 1.4284 before closing the day around 1.4180 in the New York session. Looking ahead, June Retail Sales forecast at 52.9.
The Japanese Yen (JPY) was well supported with USD/JPY falling towards Y77 and AUD/JPY crashing lower on risk aversion and the 200+ point fall in US stocks. The outlook is for more losses with the market testing the BOJ/MOF about intervention threats and the lack of support for the USD as a safe haven. Overall the USD/JPY traded with a low of 76.94 and a high of 77.83 before closing the day around 77.25 in the New York session.
The Sterling (GBP) was under pressure against the safe havens but losses where contained with plenty of support under 1.6300. GBP/CHF slipped with EUR/CHF to all time lows but EUR/GBP fell back to 0.8700 as the Euro concerns continued. Overall the GBP/USD traded with a low of 1.6235 and a high of 1.6477 before closing the day at 1.6310 in the New York session. Looking ahead, July PMI services forecast at 53.3 vs. 53.9 previously.
The Australian Dollar (AUD) was under heavy selling pressure falling over 2 big figures on a combination of risk aversion and a dovish RBA statement after the RBA held at 4.75%. Concerns about global growth and market stability trumped the high inflation readings and this pared back traders' expectations for rate hikes later this year. Overall the AUD/USD traded with a low of 1.0731 and a high of 1.1009 before closing the day at 1.0750 in the New York session. Looking ahead, June Retail Sales forecast at 0.3% vs. -0.6% previously.
Oil & Gold (XAU) Gold launched higher breaking fresh all time highs as investors flooded into the precious metal. Overall trading with a low of USD$1618 and high of USD $1661 before ending the New York session at USD$1655 an ounce. Oil slumped with forecasts for global growth being downgraded and fears of a US recession put sellers in control. WTI Oil Closed -$1.10 at $93.79 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4190
Initial support at 1.4134 (July 20 low) followed by 1.4069 (Jul 19 low). Initial resistance is now located at 1.4454 (Aug 1 high) followed by 1.4536 (Jul 27 high)
Yen - 77.30
Initial support is located at 76.61 (79.60 minus 81.48-78.47) followed by 76.25 (Mar 17 low). Initial resistance is now at 78.02 (Jun 27 high) followed by 79.32 (Jul 20 high).
Pound - 1.6265
Initial support at 1.6238 (Aug 1 low) followed by 1.6121 (Jul 20 low). Initial resistance is now at 1.6473 (Jun 7 high) followed by 1.6547 (May 31 high).
Australian Dollar - 1.0750
Initial support at 1.0694 (Jul 21 low) followed by the 1.0500 (Jun 25 low). Initial resistance is now at 1.1008 (Aug 2 high) followed by 1.1198 (1.0391 plus 0.618 of 0.9706-1.1012).
Gold - 1655
Initial support at 1616 (Aug 2 low) followed by 1603 (Jul 28 low). Initial resistance is now at 1662 (1581.85 plus 0.618 of 1478.83-1610.10) followed by 1675 (channel upper drawn off Oct, 2008 low).
Oil - 93.45
Initial support at 92.50 (Intraday Support) followed by 90.00 (Intraday Support). Initial resistance is now at 95.00 (Intraday resistance) followed by 98.00 (Intraday Resistance).
Written by Anthony Darvall