U.S. Dollar Trading (US) markets continued to be very volatile in the face of plummeting Oil and fresh doubts on the health of Chinese and US economies. Oil fell below $90 a barrel at one point as the IEA stated they would release an extra 60 million barrels of Oil onto the market to help counter disruptions from the Libyan conflict. In US stocks, DJIA -59 points closing at 12050, S&P -3 points closing at 1283 and NASDAQ +17 points closing at 2686. Looking ahead, Q1 GDP Final forecast at 1.0% vs. 1.8% previously. Also released, May Durable Goods Orders forecast at 1.5% vs. -3.6%.
The Euro (EUR) continued uncertainty and risk off trading sent the EUR/USD plummeting down to 1.41 levels before news that IMF/EU had agreed to a 5 year austerity plan helped all markets rebound quite aggressively. The news could potential end the turmoil roiling the Europeans debt markets and set the stage for focus to shift back to the hawkish ECB. Overall the EUR/USD traded with a low of 1.4125 and a high of 1.4325 before closing the day around 1.4260 in the New York session. Looking ahead, June German IFO forecast at 113.5 vs. 114.2 previously.
The Japanese Yen (JPY) was very stable against the USD with the action left to the crosses which saw very strong Yen flows on safe haven demands and just as strong reversals after the Greek deal news. Topside resistance is forming at Y80.80 and very strong support is seen at Y80. Overall the USD/JPY traded with a low of 80.32 and a high of 80.81 before closing the day around 80.50 in the New York session.
The Sterling (GBP) broke through 1.6000 and the market was extremely negative before support was found and the Euro lifted Cable back above the key level. The outlook has turned negative for the Pound with the Bank of England now seen falling further behind the tightening cycle compared to most other major countries. Overall the GBP/USD traded with a low of 1.5936 and a high of 1.6069 before closing the day at 1.6020 in the New York session. Looking ahead, BOE Posen Speaks.
The Australian Dollar (AUD) was thrown around like a rag doll down breaking below key resistance in Europe before being lifted just as sharply post Greece deal news. The outlook is closely linked as always to the stock market movements but more focus is being given to China lately. Overall the AUD/USD traded with a low of 1.0453 and a high of 1.0569 before closing the day at 1.0525 in the New York session.
Oil & Gold (XAU) Gold had a major sell off down to month lows below $1520 an ounce before stabilizing. Overall trading with a low of USD$1512 and high of USD $1549 before ending the New York session at USD$1521 an ounce. Oil reacted sharply to the IEA news but was able to recover a substantial part of the losses later in the day as US stocks reversed direction. WTI Oil Closed -1.20 at $94.21 a barrel.
Euro – 1.4255
Initial support at 1.4128 (Jun 17 low) 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 – 80.50
Initial support is located at 80.00 (Key Support) followed by 79.70 (Jun 8 low). Initial resistance is now at 81.06 (Jun 6 high) followed by 81.33 (Jun 2 high).
Pound – 1.6025
Initial support at 1.5937 (Mar 28 low) followed by 1.5881 (61.8% retrace of 1.5345-1.6747). Initial resistance is now at 1.6200 (psychological resistance) followed by 1.6313 (50% retrace of 1.6547-1.6079).
Australian Dollar – 1.0525
Initial support at 1.0441 (May 25 low) followed by the 1.0390 (Apr 12 low). Initial resistance is now at 1.0635 (Jun 17 high) followed by 1.0726 (Jun 8 high).
Gold – 1521
Initial support at 1514 (Jun 15 low) followed by 1500 (Big Figure Support). Initial resistance is now at 1549 (Jun 23 high) followed by 1577 (May 2 high).
Oil – 92.10
Initial support at 90.00 (Intraday Support) followed by 89.50 (Intraday Support). Initial resistance is now at 92.50 (Intraday resistance) followed by 95.00 (Intraday Resistance).
Written by Anthony Darvall