CURRENCY TRADING SUMMARY - 1st September (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) very weak Asian stocks helped the USD to intraday highs against most pairs except the other safe havens in the JPY and CHF. US sentiment improved though and stocks were able to finish higher as June House Price Index showed a 4.2%y/y and CB Consumer Confidence increased to 53.5 in August. In US stocks, DJIA +4 points closing at 10014, S&P +1 points closing at 1049 and NASDAQ -5 points closing at 2114. Looking ahead, August ISM Manufacturing is forecast at 53 vs. 55.5 previously and ADP Employment is forecast at 19k vs. 42k previously.

The Euro (EUR) lows of the day were seen into the European session before a solid rally in EUR/JPY helped lift and then strong US data inspired risk on trades. German Unemployment at -17k in August was roughly as forecast. EUR/USD traded with a low of 1.2624 and a high of 1.2744 before closing at 1.2675. Looking ahead, July German Retail Sales forecast at 0.5% vs. -0.9% m/m previously.

The Japanese Yen (JPY) risk aversion flows pushed the market lower and bounces were limited with the weaker USD and the major tested Y84. GBP/JPY was the weakest cross after breaking through Y130 Overall the USDJPY traded with a low of 83.81 and a high of 85.69 before closing the day around 84.40 in the New York session.

The Sterling (GBP) was under pressure for most of the day falling to month lows under 1.5400. EUR/GBP buying and GBP/JPY selling added weight as move end flows impacted the Pound negatively. UK July Lending was weak at 258mn. Overall the GBP/USD traded with a low of 1.5325 and a high of 1.5476 before closing the day at 1.5370 in the New York session.

The Australian Dollar (AUD) stabilized in Europe before rallying on good US home data and Stocks towards back above 0.8940. July Retail Sales surged 0.7% vs. 0.4% previously. Overall the AUD/USD traded with a low of 0.8859 and a high of 0.8959 before closing the US session at 0.8950. Update Q2 GDP surges 1.2% vs. 0.9% forecast Q/Q.

Oil & Gold (XAU) broke above $1240 on its way to test $1250. Overall trading with a low of USD$1231 and high of USD $1250 before ending the New York session at USD$1246 an ounce. Oil remained under pressure falling -$2.78. WTI Oil Closed -$2.78 at $71.92 a barrel.



TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2434

1.2588

1.2690

1.2933

1.3000

USD/JPY

83.60

84.28

84.45

86.38

88.12

GBP/USD

1.5125

1.5324

1.5365

1.5475

1.5713

AUD/USD

0.8634

0.8771

0.8990

0.9080

0.9222

XAU/USD

1190.00

1210

1245

1247

1265.00

OIL/USD

70.00

71.00

72.30

72.50

75.00





Euro - 1.2690

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen - 84.45

Initial support is located at 84.28 (August 27 low) followed by 83.60 (May 1995 low). Initial resistance is now at 86.38 (August 13 high) followed by 87.15 (38.2% retrace of 92.89-83.60).

Pound - 1.5365

Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5475 (Aug 31 high) followed by 1.5713 (Aug 12 high).

Australian Dollar - 0.8990

Initial support at 0.8771 (Aug 25 low) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9080 (August 17 high) followed by 0.9222 (Aug 6 high).

Gold - 1247

Initial support at 1210 (Aug 13 low) followed by 1190 (Aug 10 low). Initial resistance is now at 1247 (June 30 high) followed by 1265 (June 21 high).

Oil - 72.30

Initial support at 71.00 (Intraday Support) followed by 70.00 (Intraday Support). Initial resistance is now at 72.50 (Intraday Resistance) followed by 75.00 (Intraday Resistance).