Heavy Selling Back

U.S. Dollar Trading (US) the markets rolled over and sold off sharply last night in the US session with concerns that the Greece situation was not going to resolved quickly. Commodities sold off aggressively and stocks fell 300 points from highs of the day. In US stocks, DJIA -179 points closing at 11010, S&P -24 points closing at 1151 and NASDAQ -55 points closing at 2491. Looking ahead, Q2 GDP forecast at 1.2% vs. 1.0% previously. Weekly Jobless Claims forecast at 420k vs. 423k previously.

The Euro (EUR) the EUR/USD fell from the 1.3600 to 1.3520 in late US session before stabilizing at lows. The lack of progress on the Greece debt deal and talk of a European financial tax is creating risk off trading environment as a solution is searched for. Looking ahead, September German Unemployment forecast at -8k and the Unemployment rate remained at 7.0%.

The Japanese Yen (JPY) heavy crosses sent the major back to Y76.50 and this could come under more pressure if the EUR/JPY and AUD/JPY continue to pressure on the downside. Today's German vote will be the main impact point for the EUR/JPY seen as an indication of support of Germany's Chancellor Merkal or not.

The Sterling (GBP) came under heavy selling pressure with the Euro keeping in lock step with EUR/GBP in a tight range. The selling pushed GBP/USD through 1.5600 before stabilizing into the close. The EU Troika inspectors are in Athens to review whether Greece receives the next segment of aid.  

The Australian Dollar (AUD) the Aussie was hit hardest overnight with the heavy stock market selloff and the Greece concerns compounded by China Trade war talks. Support broke at 0.9800 and then in late US session the market fell to 0.9750. The outlook is largely dependent on what happens in Europe but the new China negative news could also be a major factor.

Oil & Gold (XAU) Gold crashed with the sell trade being linked to increased demand for cash and liquidation of long gold positions on rallies the main talk in the markets. Crude Oil reversed aggressively falling below $80 a barrel by days end to undo the rally in the first part of the week.

Pairs to watch

EUR/USD German Vote Pass?

XAU/USD Are we in for more heavy selling?


TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3356

1.3479

1.3535

1.3718

1.3797

USD/JPY

75.00

75.95

76.55

77.00

77.28

GBP/USD

1.5433

1.5526

1.5565

1.5706

1.5870

AUD/USD

0.9537

0.9622

0.9725

0.9986

1.0194

XAU/USD

1532.00

1587

1595

1676

1704

OIL/USD

78.00



80.00

80.20

83.00

85.00



Euro - 1.3535

Initial support at 1.3479 (Sept 27 low) followed by 1.3356 (76.4% retrace of 1.2867-1.4940). Initial resistance is now located at 1.3718 (61.8% retrace of 1.3937-13363) followed by 1.3797 (Sept 21 high)



Yen - 76.55

Initial support is located at 75.95 (Aug 19 low) followed by 75.00 (Psych Support). Initial resistance is now at 77.00 (Sep 19 high) followed by 77.28 (Aug 13 high).

Pound - 1.5565

Initial support at 1.5526 (Sept 27 low) followed by 1.5433 (Sep 26 low). Initial resistance is now at 1.5706 (Sept 27 high) followed by 1.5870 (38.2% retrace of 1.6618-1.5328).



Australian Dollar - 0.9725

Initial support at 0.9622 (Sep 26 low) followed by the 0.9537 (Dec 1 low). Initial resistance is now at 0.9986 (Sep 27 high) followed by 1.0194 (50% retrace of 1.0765-0.9622).

Gold - 1595

Initial support at 1587 (61.8% retrace of 1532.72-1676.97) followed by 1532 (Sep 26 low). Initial resistance is now at 1676 (Sep 27 high) followed by 1704 (Aug 25 low).



Oil - 80.20

Initial support at 80.00 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at  83.00 (Intraday resistance) followed by 85.00 (Intraday Resistance).





Written by Anthony Darvall