U.S. Dollar Trading (US) some negativity entered the US market after the US FED Chief Bernanke signaled QE2 would end as planned whilst also downgrading forecasts for 2011 and 2012 GDP. QE3 seems off the table for now given Bernanke's concerns about inflation. The Dollar was broadly stronger as the market sees the road to tightening now shorter. In US stocks, DJIA -80 points closing at 12109, S&P -8 points closing at 1287 and NASDAQ -18 points closing at 2669. Looking ahead, Weekly Jobless Claims forecast at 415k vs. 414k previously.
The Euro (EUR) The afterglow of the positive confidence vote for Greece PM ended in Asia and profit taking was seen ahead of the US FED decision. The neutral FOMC statement helped the Dollar to rally and weak stocks added to the downside pressure. EUR/GBP buying helped support the single currency. Overall the EUR/USD traded with a low of 1.4307 and a high of 1.4443 before closing the day around 1.4325 in the New York session. Looking ahead, June PMI Manufacturing forecast at 53.8 vs. 56.1 previously.
The Japanese Yen (JPY) pushed off the Y80 level grinding higher after the US central bank decision with US bond Yields increasing most noticeable on the 10 Year. A further bounce is possible given the lack of play QE3 is getting and a base in the USD/JPY may have been forged in recent weeks. Overall the USD/JPY traded with a low of 80.00 and a high of 80.43 before closing the day around 80.25 in the New York session.
The Sterling (GBP) was the weakest currency in the market under pressure before the general USD strength on its own Bank of England meeting minutes. The vote came in 7-2 as expected but support for further expansion of the asset purchase program gave bears ammunition to sell Cable back towards the 1.6000 level. Overall the GBP/USD traded with a low of 1.6040 and a high of 1.6265 before closing the day at 1.6055 in the New York session. Looking ahead, June CBI Distributive Trades forecast at 10 vs. 18 previously.
The Australian Dollar (AUD) was under pressure given risk off trading with US stocks falling into the close. The 1.0500 level is forming as a key support once again with most traders waiting to see fresh stock market direction before committing to a new trend. Overall the AUD/USD traded with a low of 1.0534 and a high of 1.0652 before closing the day at 1.0550 in the New York session.
Oil & Gold (XAU) broke resistance in Europe trading up to $1558 and taking out stops before reversing back under the figure post FOMC. Overall trading with a low of USD$1541 and high of USD $1558 before ending the New York session at USD$1545 an ounce. Oil fell on the weaker FED growth forecasts for the world's largest user. WTI Oil Closed -1.20 at $94.21 a barrel.
Euro - 1.4300
Initial support at 1.4142 (76.4% retrace of 1.3970-1.4697) followed by 1.4068 (May 26 low). Initial resistance is now located at 1.4459 (61.8% retrace of 1.4697-1.4074) followed by 1.4500 (Psychological Resistance)
Yen - 80.55
Initial support is located at 80.00 (Key Support) followed by 79.70 (Jun 8 low). Initial resistance is now at 81.01 (Jun 3 high) followed by 81.33 (Jun 2 high).
Pound - 1.6025
Initial support at 1.6000 (Key Support) followed by 1.5950 (Minor Support). Initial resistance is now at 1.6263 (Jun 22 high) followed by 1.6313 (50% retrace of 1.6547-1.6079).
Australian Dollar - 1.0545
Initial support at 1.0510 (May 26 low) followed by the 1.0440 (May 25 low). Initial resistance is now at 1.0635 (Jun 17 high) followed by 1.0726 (Jun 8 high).
Gold - 1545
Initial support at 1533 (Jun 20 low) followed by 1522 (May 17 low). Initial resistance is now at 1560 (Psychological Resistance) followed by 1577 (May 2 high).
Oil - 94.30
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