U.S. Dollar Trading (US) most markets were quiet until the shock announcement that the ECB BOJ BOE and US FED were coordinating to provide European banks access to US dollars and help ease any liquidity issues that may arise in the debt crisis. Most markets shot higher and risk appetite improved with the market now expecting more support from the EU Finance meeting today. In US stocks, DJIA +186 points closing at 11433, S&P +20 points closing at 1209 and NASDAQ +34 points closing at 2607. Looking ahead, UoM Consumer Sentiment forecast at 56.4 vs. 55.7 previously.
The Euro (EUR) the Euro was the main benefiter from the central bank coordination and the EUR/USD pushed higher to 1.3900 before easing back to 1.3850 for the rest of the day. The outlook is still extremely uncertain with the EU finance ministers meeting today. The meeting is unusual with US treasury secretary also attending. Looking ahead, Day 1 ECONFIN Meeting.
The Japanese Yen (JPY) surged to Y77.30 from Y76.60 on the central bank news before easing back below Y77 on USD weakness as risk appetite picked up. EUR/JPY broke above Y106 and is creeping higher with fear receding. The crosses mostly track the stock markets and a rally from here could set a new trend higher.
The Sterling (GBP) better than expected data and the risk on rally helped the GBP/USD to 1.5860 before easing back to the 1.5800 level to close. The EUR/GBP shot higher to 0.8780 with the single currency enjoyed support from central banks. August Retail sales came in at -0.2% vs. -0.3% m/m forecast. Looking forward, Chancellor Osborne Speaks.
The Australian Dollar (AUD) the Aussie retested 1.0180 for a second day and put in a triple bottom which is normally a very solid buy indicator. The risk currency then rallied with stocks to 1.0350 and is well supported on the crosses. The outcome of the EU meeting today and tomorrow will set the tone for next week and Monday's open.
Oil & Gold (XAU) Gold broke under $1800 on the central bank news and the slid to $1773 before bouncing and consolidating under the key figure. Crude Oil tested $90 but failed to hold above the figure and range traded for the rest of the day below.
Pairs to watch
EUR/USD Will the Eurobond idea save the EURO?
XAU/USD is the uptrend over?
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3850
Initial support at 1.3703 (Sept 15 low) followed by 1.3591 (Sept 14 low). Initial resistance is now located at 1.3937 (Sept 9 high) followed by 1.4149 (Sept 7 high)
Yen - 76.75
Initial support is located at 76.61 (Sep 14 low) followed by 76.43 (Aug 31 low). Initial resistance is now at 77.39 (Resistance) followed by 78.47 (Aug 8 high).
Pound - 1.5790
Initial support at 1.5706 (Sept 14 low) followed by 1.5680 (Dec 31 low). Initial resistance is now at 1.5815 (Sept 14 high) followed by 1.5886 (Sep 12 high).
Australian Dollar - 1.0325
Initial support at 1.0178 (Sep 14 low) followed by the 1.0110 (Aug 11 low). Initial resistance is now at 1.0376 (Sep 13 high) followed by 1.0482 (200 Day MA).
Gold - 1775
Initial support at 1757 (Aug 29 low) followed by 1700 (Big figure support). Initial resistance is now at 1845 (Sept 14 high) followed by 1921 (Sept 6 high).
Oil - 89.40
Initial support at 88.00 (Intraday Support) followed by 86.00 (Intraday Support). Initial resistance is now at 90.00 (Intraday resistance) followed by 91.00 (Intraday Resistance).
Written by Anthony Darvall