U.S. Dollar Trading (US) US stocks tumbled 500 points as concerns about French banks led to market wide panic and a reversal of the positive rally the day before. Gold surged to fresh record highs and banking stocks around the world came under heavy pressure. In US stocks on Friday, DJIA -519 points closing at 10719, S&P -51 points closing at 1120 and NASDAQ -101 points closing at 2381. Looking ahead, Weekly Jobless Claims forecast at 400k. June Trade Balance forecast at -38bn vs. -50bn previously.
The Euro (EUR) was under heavy selling pressure for most of the day with the Eurozone Debt Crisis spreading to France where rumors of a downgrade spilled over to French banks which lost over 10% in share price. The Major slipped from 1.4400 in Asia to 1.4150 in late US trade with EUR/JPY and EUR/CHF also very heavy.
The Japanese Yen (JPY) the market remained heavy for most of the day with little follow through from the large Dow rally and then cross selling with the US stock market collapse. The market has been selling from Y80 on a daily basis with the market searching for the level which the BOJ will intervene once again.
The Sterling (GBP) a 4th day of riots is weighing on the GBP which fell quit heavily in Europe and then in the US session on risk aversion and weak data. BOE Governor King downgraded the central banks economic outlook but did remain confident inflation will drop. Support was found at 1.6100 and EUR/GBP reversed from a spike higher in Europe to finish under 0.8800.
The Australian Dollar (AUD) the Aussie came under heavy selling pressure in the European and the US session with the volatile stock markets creating havoc for traders with support and resistances seemingly nonexistent. AUD/JPY fell back under Y78 and is still under pressure. UPDATE JULY Employment Change -0.1k vs. 10k forecast. July Unemployment Rate at 5.1% vs. 4.9% previously.
Oil & Gold (XAU) Gold surge on French bank fears breaking above $1800 and hitting fresh all time highs at $1815. Crude bounced off $80 and rallied back to $83 with the stock market moves strangely ignored.
Pairs to watch
XAU/USD overbought conditions creating volatility
USD/JPY back at last Thursday's intervention levels.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4243
Initial support at 1.4014 (July 18 low) followed by 1.3951 (Jul 13 low). Initial resistance is now located at 1.4454 (Aug 1 high) followed by 1.4536 (Jul 27 high)
Yen - 77.65
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 - 1.6190
Initial support at 1.6176 (Aug 9 low) followed by 1.6121 (Jul 21 low). Initial resistance is now at 1.6411 (Aug 9 high) followed by 1.6547 (May 31 high).
Australian Dollar - 1.0270
Initial support at 1.0000 (Big figure level) followed by the 0.9928 (Aug 9 low). Initial resistance is now at 1.0500 (Previous support) followed by 1.0600 (Big figure).
Gold - 1786
Initial support at 1702 (Aug 9 low) followed by 1603 (Jul 28 low). Initial resistance is now at 1800 (Pysch level) followed by 1815 (Aug 10 high).
Oil - 82.70
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