U.S. Dollar Trading (US) global stocks continue to weaken into the weekend with sentiment remaining very fragile. Hopes for a relief rally are under pressure with most of the gains seen last week pared back on Thursday and Friday. In US stocks on Friday, DJIA -172 points closing at 10817, S&P -17 points closing at 1123 and NASDAQ -38 points closing at 2341.
The Euro (EUR) the Euro was well supported even in risk aversion with EUR/CHF buying supporting. The buying into the US session was aggressive and caught the market short with a move from 1.4300 to 1.4450. The weakness in US stocks then acted as a drag into the close. The Eurozone debt crisis is now debating the question of Eurobonds as a means of ending the crisis but Germany is opposed to the idea.
The Japanese Yen (JPY) under a lot of attention during Asia on Monday with talk from BOJ Noda that Japan will take bold action on the Yen over the weekend. The USD/JPY tested new fresh lows on Friday under Y76 briefly before surging on intervention fears. The outlook is mixed with most analysts seeing intervention as failing to stop the Yens rise.
The Sterling (GBP) the GBP/USD remained buoyant as the EUR/USD rally helped support on a dips. Resistance at 1.6600 proved strong and the market fell back into the close. EUR/GBP found support under 0.8700 and closed above the figure.
The Australian Dollar (AUD) the market was caught short on the Aussie after such heavy selling on Thursday and we had a short squeeze in Europe back to 1.0480. The gains were pared into the close and more downside is likely if stock markets continue to fall.
Oil & Gold (XAU) Gold surged for fresh record highs on Friday with little resistance until $1880. The extremely overbought precious metal is hard to sell with daily gains. Crude was supported at $80 a barrel and bounced to $82.50.
Pairs to watch
XAU/USD $1900 is now the bulls target
USD/JPY is the BOJ going to intervene again?
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4375
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 76.25 (Mar 15 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 - 1.6495
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 - 1.0430
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 - 1868
Initial support at 1821 (Aug 19 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 - 83.05
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