Daily Outlook - China Economy Running Hot, RRR Lifted 0.5%

By @ibtimes on

U.S. Dollar Trading (USD) stocks finished on a strong note after decent US economic data which  also encouraged US Dollar support. March CPI came in at 0.5% as expected and April NY FED jumped to 21.7 vs. 17.5 previously. In US stocks, DJIA +56 points closing at 12341, S&P +5 points closing at 1319 and NASDAQ +4 points closing at 2764. Looking ahead, April NAHB Housing Market forecast unchanged at 17.

The Euro (EUR) remained locked in the 1.4400-500 range that has been well established throughout the last week with the topside resistance proving hard for the buyers to crack. March Euroland Core Inflation was at 1.3% vs. 1.0% previously y/y. Overall the EUR/USD traded with a low of 1.4389 and a high of 1.4504 before closing the day around 1.4420 in the New York session. Looking ahead, April EU Consumer Confidence forecast at 17.

The Japanese Yen (JPY) had a very strong day gaining across the board as the recent uptrend is tested on many crosses. USD/JPY tested Y83 and EUR/JPY tested support under Y120. The outlook is quite mixed as the USD/JPY rally begins to unravel and the nuclear crisis affect abates. Overall the USD/JPY traded with a low of 82.94 and a high of 83.78 before closing the day around 83.09 in the New York session.

The Sterling (GBP) outperformed the Euro in a notable downside test for the EUR/GBP which threatens the recent uptrend. Cable found support under 1.6300 and stabilized near the figure into the weekend. Overall the GBP/USD traded with a low of 1.6291 and a high of 1.6373 before closing the day at 1.6293 in the New York session.

The Australian Dollar (AUD) grinded higher tracking Gold and US stocks higher towards 1.0580. Continued outperformance is expected over the coming months while the high yielding Aussie receives market wide support. Overall the AUD/USD traded with a low of 1.0509 and a high of 1.0578 before closing the day at 1.0554 in the New York session.

Oil & Gold (XAU) fresh record highs were seen with a break $1480 leading to more gains. $1500 is the biggest resistance level Gold has faced in over a year and is shaping as a major test for the precious metal. Overall trading with a low of USD$1471 and high of USD $1488 before ending the New York session at USD$1486 an ounce. Buyers remained in control as the market retests the key $110 level. WTI Oil Closed +$1.50 at $109.20 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4291

1.4329

1.4370

1.4520

1.4579

USD/JPY

82.37

82.55

82.90

84.26

85.53

GBP/USD

1.6091

1.6183

1.6280

1.6428

1.6516

AUD/USD

1.0315

1.0390

1.0570

1.0584

1.0600

XAU/USD

1430.00

1452

1486

1500

1510

OIL/USD

106.00

108.00

109.00

110.00

113.50

Euro - 1.4370

Initial support at 1.4329 (38.2% retrace of 1.4021-1.4520) followed by 1.4291 (Apr 8 low). Initial resistance is now located at 1.4520 (Apr 12 high) followed by 1.4579 (Jan 13, 2010 high)

Yen - 82.90

Initial support is located at 82.55 (Apr 1 low) followed by 82.37 (Mar 30 low). Initial resistance is now at 85.16 (Apr 11 high) followed by 85.53 (Apr 6 High).

Pound - 1.6280

Initial support at 1.6183 (61.8% retrace of 80.70-85.53) followed by 1.6091 (Apr 5 low). Initial resistance is now at 1.6428 (Apr 8 high) followed by 1.6516 (Dec 7 2009 high).

Australian Dollar - 1.0570

Initial support at 1.0390 (Apr 12 low) followed by the 1.0315 (Apr 6 low). Initial resistance is now at 1.0584 (Apr 8 high) followed by 1.0600 (1.0412 plus 1.0289-1.0508).

Gold - 1486

Initial support at 1452 (Apr 14 low) followed by 1430 (Apr 5 low). Initial resistance is now at 1500 (Big Figure Major Resistance) followed by 1510 (Intraday Resistance).

Oil - 109.00

Initial support at 108.00 (Intraday Support) followed by 106.00 (Intraday Support). Initial resistance is now at 110.00 (Intraday resistance) followed by 113.50 (Intraday Resistance).

Written by Anthony Darvall

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