U.S. Dollar Trading (US) Stocks were down in another change of direction with sentiment fickle and once again testing support on many major currency pairs. Weekly Jobless Claims pushed up to 417k vs. 408k previously but is still stable. In US stocks on Friday, DJIA -170 points closing at 11149, S&P -18 points closing at 1159 and NASDAQ -48 points closing at 2419. Looking ahead, Fed Chief Bernanke Speaks at the Jackson Hole Symposium.

The Euro (EUR) tested the bottom of the recent range at 1.4350 with the EUR/USD sold off on German short selling ban rumors which were later denied. German GFK Consumer Confidence dropped with to 5.2 as expected. Looking ahead, German July Import prices gained 0.1% vs. -0.6% m/m previously.

The Japanese Yen (JPY) USD/JPY was strong breaking above Y77 resistance and grinding higher to Y77.50. The outlook now is largely determined on whether the Bernanke's speech mentions QE3 or any other easing measures to help support the US economy. UPDATE July CPI at 0.2% y/y unchanged.

The Sterling (GBP) Broke below 1.6300 and was under pressure when the German stock market falls on the short selling ban rumors. The market failed to bounce off these levels and entered Asian trade in a very quiet mood. Looking ahead, Q2 GDP forecast at 0.2% Q/Q.

The Australian Dollar (AUD) The Aussie tried to break above 1.0500 but was unable to hold onto the gains and fell back with US stocks later in the day. The AUD/USD has been very quiet given the stock market volatility but is threatening to push higher as AUD/JPY continues to support. RBA Governor Stevens is trying to put a cap on the AUD/USD saying that at 1.1000 the Aussie was getting ahead of itself.

Oil & Gold (XAU) Gold rebounded aggressively up over $70oz from lows. Crude was volatile down $3 a barrel sharply at the start of the US session before recovering and closing above the key $85 level.

Pairs to watch

USD/JPY broken out of the range to the topside, more gains to come?

AUD/USD waiting for the Bernanke speech before picking direction?



TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4150

1.4347

1.4405

1.4500

1.4536

USD/JPY

75.00

75.95

77.35

77.86

78.86

GBP/USD

1.6167

1.6256

1.6290

1.6534

1.6661

AUD/USD

1.0246

1.0387

1.0485

1.0533

1.0786

XAU/USD

1681.00

1700

1763

1800

1850

OIL/USD

82.50



85.00

85.25

87.00

88.00



Euro - 1.4405

Initial support at 1.4347 (Aug 22 low) followed by 1.4150 (Aug 12 low). Initial resistance is now located at 1.4500 (Aug 23 high) followed by 1.4536 (Jul 27 high)



Yen - 77.35

Initial support is located at 75.95 (Aug 19 low) followed by 75.00 (Psych level). Initial resistance is now at 77.86 (Aug 9 high) followed by 78.47 (Aug 8 high).

Pound - 1.6290

Initial support at 1.6256 (Aug 15 low) followed by 1.6256 (Aug 15 low). Initial resistance is now at 1.6534 (Aug 24 high) followed by 1.6661 (May 3 high).



Australian Dollar - 1.0485

Initial support at 1.0387 (Aug 23 low) followed by the 1.0246 (Aug 12 low). Initial resistance is now at 1.0559 (Aug 18 high) followed by 1.0786 (Aug 3 High).

Gold - 1763

Initial support at 1700 (Psych Level) followed by 1680 (Psych Level). Initial resistance is now at 1800 (Psych Level) followed by 1913 (Aug 23 high).



Oil - 85.25

Initial support at 85.00 (Intraday Support) followed by 82.50 (Intraday Support). Initial resistance is now at 87.00 (Intraday resistance) followed by 88.00 (Intraday Resistance).





Written by Anthony Darvall