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U.S. Dollar Trading (US) a lot going on in dramatic trading yesterday with the USD under pressure across the board on comments from Bernanke stating he is prepared to step in and help the economy if Job growth weakens and inflation remains low. This was taken by the market to mean QE3 was a very real option on the table. In US stocks, DJIA -58 points closing at 12446, S&P -5 points closing at 1313 and NASDAQ -20 points closing at 2781. Looking ahead, Retail Sales forecast at -0.1% vs. -0.2% m/m previously. Weekly Jobless Claims forecast at 415k vs. 418k previously.
The Euro (EUR) surged back to life gaining on the back of Strong Chinese GDP in Asia and the QE3 comments from Bernanke in the US. The break above 1.4200 late in day is a stunning reversal from the depths seen on Tuesday. Overall the EUR/USD traded with a low of 1.3961 and a high of 1.4283 before closing the day around 1.4220 in the New York session. Looking ahead, June Inflation forecast at 2.7% y/y.
The Japanese Yen (JPY) was weaker against the crosses which took advantage of the recovery rally in the Euro. The Moody’s downgrade warning saw the USD/JPY move back to Y79 and some of the gains on the crosses pulled back with US stocks Futures reacting negatively after the close. Overall the USD/JPY traded with a low of 78.64 and a high of 79.59 before closing the day around 79.10 in the New York session.
The Sterling (GBP) enjoyed Majors gains throughout the day against most pairs tracking the Euro higher. Cable broke above 1.6000 in the US session and surged to 1.6150. June Claimant Count was higher than expected at 24.5k vs. 15k forecast. Overall the GBP/USD traded with a low of 1.5906 and a high of 1.6196 before closing the day at 1.6160 in the New York session.
The Australian Dollar (AUD) enjoyed 200 pips gains to test 1.0800 after the US debt warning. AUD/JPY rallied throughout the day with BOJ officials beginning to talk about the sharp fall in the USD/JPY in recent sessions. Overall the AUD/USD traded with a low of 1.0582 and a high of 1.0788 before closing the day at 1.0730 in the New York session.
Oil & Gold (XAU) broke to all-time highs in a major move higher to test $1590. Overall trading with a low of USD$1564 and high of USD $1590 before ending the New York session at USD$1588 an ounce. Gained aggressively to test $99 before falling back to $98 on profit taking. WTI Oil Closed +$1.20 at $98.00 a barrel.
Euro – 1.4215
Initial support at 1.3837 (Jul 12 low) followed by 1.3752 (Mar 11 low). Initial resistance is now located at 1.4298 (Jul 11 high) followed by 1.4375 (Jul 7 high)
Yen – 78.70
Initial support is located at 78.00 (Big Figure support) followed by 76.25 (Mar 17 low). Initial resistance is now at 80.38 (Jul 12 high) followed by 80.83 (Jul 11 high).
Pound – 1.6135
Initial support at 1.5906 (Jul 13 low) followed by 1.5781 (Jul 12 low). Initial resistance is now at 1.6254 (61.8% retrace of 1.6547-1.5781) followed by 1.6300 (Big Figure).
Australian Dollar – 1.0735
Initial support at 1.0580 (Jul 13 low) followed by the 1.0520 (Jun 29 low). Initial resistance is now at 1.0790 (Jul 1 low) followed by 1.0889 (May 11 high).
Gold – 1584
Initial support at 1553 (Jul 13 low) followed by 1540 (Jul 12 low). Initial resistance is now at 1600 (Key Resistance) followed by 1528 (1462.45 plus 0.618 of 1577.57-1308.25).
Oil – 97.60
Initial support at 95.00 (Intraday Support) followed by 92.50 (Intraday Support). Initial resistance is now at 98.00 (Intraday resistance) followed by 99.00 (Intraday Resistance).
Written by Anthony Darvall