U.S. Dollar Trading (US) stocks opened to the downside but the reaction on the FX markets was muted with the event risk of the debt negotiations and a possible deal at any time. The reaction to a deal could be Dollar positive but stock markets and risk appetite will be key for FX movement. The reaction to no deal would be a major shock to global financial markets. In US stocks, DJIA -88 points closing at 12592, S&P -7 points closing at 1337 and NASDAQ -16 points closing at 2842. Looking ahead, June New Homes Sales forecast at 0.32mn vs. 0.319mn previously.
The Euro (EUR) the Euro was well supported even with stocks down as the market is wary of buying the USD while the debt debate rages on in Washington. Moody's downgraded Greece once again and warned of investor losses from the EU rescue plan. Overall the EUR/USD traded with a low of 1.4324 and a high of 1.4408 before closing the day around 1.4390 in the New York session. Looking ahead, August GFK Confidence forecast at 5.6 vs. 5.7 previously.
The Japanese Yen (JPY) the Yen remained favored and the USD/JPY remained pressured testing Y78 but holding and closing slightly higher off the level. AUD/JPY and EUR/JPY are struggling while the USD/JPY remains under pressure but stock markets will direct the majority of the movement. Overall the USD/JPY traded with a low of 78.04 and a high of 78.56 before closing the day around 78.20 in the New York session.
The Sterling (GBP) continued to pivot the 1.6300 level while the traders pushed pause waiting for Greece and US debt clarification. EUR/GBP grinded higher after testing 0.8800 and is well supported on the strong EUR/USD movements of late. Overall the GBP/USD traded with a low of 1.6260 and a high of 1.6330 before closing the day at 1.6290 in the New York session. Looking ahead, Q2 forecast at 0.2% vs. 0.5% previously.
The Australian Dollar (AUD) was under pressure due to weakness in stocks but tracked Gold and Euro higher in the US session on the broad US weakness. Q2 PPI was strong as expected at 0.8% Q/Q. Wednesday CPI numbers will be very important to the central banks interest rate decision. Overall the AUD/USD traded with a low of 1.0794 and a high of 1.0879 before closing the day at 1.0850 in the New York session. Looking ahead, RBA Governor Speaks.
Oil & Gold (XAU) Gold broke to fresh all time highs well supported on the US debt ceiling worries and Greece downgrade. Overall trading with a low of USD$1608 and high of USD $1622 before ending the New York session at USD$1613 an ounce. Oil fell back with stocks but only slightly. WTI Oil Closed -$0.67 at $99.20 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4395
Initial support at 1.4134 (Jul 20 low) followed by 1.4069 (Jul 19 low). Initial resistance is now located at 1.4467 (Jul 6 high) followed by 1.4554 (Jul 5 high)
Yen - 78.10
Initial support is located at 78.00 (Big Figure support) followed by 76.25 (Mar 17 low). Initial resistance is now at 79.03 (Jun 21 high) followed by 80.83 (Jul 11 high).
Pound - 1.6300
Initial support at 1.6121 (Jul 21 low) followed by 1.6069 (Jul 20 low). Initial resistance is now at 1.6366 (76.4% retrace of 1.6547-1.5781) followed by 1.6442 (Jun 14 high).
Australian Dollar - 1.0855
Initial support at 1.0694 (Jul 21 low) followed by the 1.0598 (Jun 19 low). Initial resistance is now at 1.0889 (May 11 high) followed by 1.0953 (May 3 high).
Gold - 1610
Initial support at 1584 (Jul 22 low) followed by 1564 (Jul 13 low). Initial resistance is now at 1628 (1462.45 plus 0.618 of 1577.57-1308.25) followed by 1632 (1608.10 plus 0.618 of 1624.07-1584.23).
Oil - 99.10
Initial support at 98.00 (Intraday Support) followed by 95.00 (Intraday Support). Initial resistance is now at 100.00 (Intraday resistance) followed by 100.50 (Intraday Resistance).
Written by Anthony Darvall