U.S. Dollar Trading (US) fear crept into the markets Monday causing another heavy sell off in global stocks with focus on Italy and money flooding out of the European debt markets. This Combined with the high Chinese CPI data saw investor sentiment very weak globally. The Dollar gained as a safe haven but underperformed the other havens in Gold and Yen. In US stocks, DJIA -151 points closing at 12505, S&P -24 points closing at 1319 and NASDAQ -57 points closing at 2802.
The Euro (EUR) bore the brunt of the Italy led risk aversion with the Euro opening at 1.4250 and falling steadily to test 1.4000. EUR/JPY was even weaker falling below Y113. The market is on edge that the Greece debt solution will involve a default that might lead to a domino effect on other countries with Italy seen as too big to bailout. Overall the EUR/USD traded with a low of 1.3985 and a high of 1.4229 before closing the day around 1.4020 in the New York session.
The Japanese Yen (JPY) was strong overnight gaining across the board with USD/JPY edging closer to Y80 and crosses led by the EUR/JPY moving big figures. A break of Y80 on the major would be a bearish event and could lead to major losses. Overall the USD/JPY traded with a low of 80.09 and a high of 80.84 before closing the day around 80.25 in the New York session. Looking ahead BOJ Rate announcement forecast unchanged at 0.1%.
The Sterling (GBP) was weaker as risk aversion overwhelmed support seen from EUR/GBP selling and Cable broke back below 1.6000 to 1.5900. The outlook is negative with the downtrend only consolidating last week and fresh multi week lows seen overnight. Overall the GBP/USD traded with a low of 1.5880 and a high of 1.6043 before closing the day at 1.5910 in the New York session. Looking ahead, June CPI forecast unchanged at 4.5% y/y.
The Australian Dollar (AUD) broke lower under 1.0700 in Asia and added to the losses in the US session hitting support under 1.0650 before bouncing. AUD/JPY fell heavily and is heading towards Y85 a major medium term support. Overall the AUD/USD traded with a low of 1.0625 and a high of 1.0729 before closing the day at 1.0650 in the New York session. UPDATE June Business Confidence at 0 vs. 6 previously.
Oil & Gold (XAU) the Italian debt fears and US debt ceiling debate caused gold to break above $1550. Overall trading with a low of USD$1541 and high of USD $1557 before ending the New York session at USD$1553 an ounce. Was sold heavily on concerns the US economy was not creating jobs and thus consumers as fast as forecast. WTI Oil Closed -$1.30 at $94.90 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4005
Initial support at 1.3970 (May 23 low) followed by 1.3903 (50% retrace of 1.2867-1.494). Initial resistance is now located at 1.4297 (Jul 11 high) followed by 1.4375 (Jul 7 high)
Yen - 80.15
Initial support is located at 80.00 (Key support) followed by 79.57 (May 5 low). Initial resistance is now at 81.48 (Jul 8 high) followed by 81.77 (May 31 high).
Pound - 1.5895
Initial support at 1.5881 (61.8% retrace of 1.5345-1.6747) followed by 1.5822 (Jan 31 low). Initial resistance is now at 1.6056 (July ll high) followed by 1.6091 (Jul 06 high).
Australian Dollar - 1.0595
Initial support at 1.0520 (Jun 29 low) followed by the 1.0436 (Jun 28 low). Initial resistance is now at 1.0655 (Jul 6 low) followed by 1.0790 (Jul 1 high).
Gold - 1553
Initial support at 1524 (Jul 8 low) followed by 1492 (Jul 5 low). Initial resistance is now at 1558 (June 22 high) followed by 1577 (May 2 high).
Oil - 94.90
Initial support at 92.50 (Intraday Support) followed by 90.00 (Intraday Support). Initial resistance is now at 95.00 (Intraday resistance) followed by 98.00 (Intraday Resistance).
Written by Anthony Darvall