Italy, Weak US Jobs and China CPI adding Downside Pressure
U.S. Dollar Trading (US) markets opened negative on Monday as Chinese inflation data added to the weak lead from the June NonFarm Payrolls on Friday. The USD gained on the back of safe haven demand with fresh EU debt concerns adding another layer of fear. June Nonfarm Payrolls at 18k vs. 90k forecast. The Unemployment rate increased to 9.2%. In US stocks, DJIA -62 points closing at 12657, S&P -9 points closing at 1343 and NASDAQ -12 points closing at 2859.
The Euro (EUR) fell heavily in Europe as focus turned to Italy with concerns that heavily indebted could be the next domino to fall in the saga. The market bounced on the Weak US data but the sellers came back in to leave the EUR/USD under pressure into the weekend. The Euro opened Monday under further pressure with the news the EU held emergency meeting over the weekend to deal with the Italy fears seen on Friday. Overall the EUR/USD traded with a low of 1.4204 and a high of 1.4368 before closing the day around 1.4250 in the New York session.
The Japanese Yen (JPY) was the safe haven of choice with the major USD/JPY falling sharply after weak US jobs data. The mood was a sharp contrast to the previous European and Asian sessions where a range break to the topside had technical analysts calling for more gains. EUR/JPY led the crosses lower with Italy fears spooking buyers. Overall the USD/JPY traded with a low of 80.48 and a high of 81.48 before closing the day around 80.64 in the New York session.
The Sterling (GBP) was a major outperformer surging back above 1.6000 with EUR/GBP selling helping the major rally and ignore risk aversion. June PPI was still high at 17% y/y vs. 16.1% previously. CHF and GBP stand to gain if the Euro and US debt problems persist. Overall the GBP/USD traded with a low of 1.5930 and a high of 1.6077 before closing the day at 1.6039 in the New York session.
The Australian Dollar (AUD) fell back heavily on the weaker than expected US jobs data and subsequent weak stock market moves. Support was found near 1.0700 but the market was greeted with strong Chinese inflation data over the weekend which could prompt heavy liquidations if tightening fears grip in Monday trade. Overall the AUD/USD traded with a low of 1.0699 and a high of 1.0788 before closing the day at 1.0745 in the New York session.
Oil & Gold (XAU) Gold Surged with the alternative currency finished a stellar week up $40 an ounce. Overall trading with a low of USD$1525 and high of USD $1545 before ending the New York session at USD$1544 an ounce. Was sold heavily on concerns the US economy was not creating jobs and thus consumers as fast as forecast. WTI Oil Closed -$2.47 at $96.20 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4205
Initial support at 1.4103 (Jun 27 low) followed by 1.4074 (Jun 16 low). Initial resistance is now located at 1.4467 (Jul 6 high) followed by 1.4578 (Jul 4 high)
Yen - 80.75
Initial support is located at 80.29 (Jun 27 low) followed by 80.00 (Key Support). Initial resistance is now at 81.77 (May 31 high) followed by 82.23 (May 19 high).
Pound - 1.6025
Initial support at 1.5911 (Jun 28 low) followed by 1.5822 (Jan 31 low). Initial resistance is now at 1.6091 (Jul 6 high) followed by 1.6263 (Jun 22 high).
Australian Dollar - 1.0710
Initial support at 1.0655 (Jul 6 low) followed by the 1.0520 (Jun 29 low). Initial resistance is now at 1.0790 (Jul 1 high) followed by 1.0889 (May 11 high).
Gold - 1543
Initial support at 1510 (Jul 6 low) followed by 1492 (Jul 5 low). Initial resistance is now at 1549 (June 23 high) followed by 1558 (Jun 22 high).
Oil - 95.90
Initial support at 95.00 (Intraday Support) followed by 92.50 (Intraday Support). Initial resistance is now at 98.00 (Intraday resistance) followed by 100.00 (Intraday Resistance).
Written by Anthony Darvall