Last week's currency trading review

The Dollar weak US data and fresh EU debt worries dominated the market last week and allowed the USD to gain against most currencies especially on Friday. The FOMC minutes surprised with some members unhappy with the easing language and this saw QE3 come into question. The case was helped on Friday though with August NFP at 0 vs. +75k forecast. Consumer Confidence also shocked last week falling to recession levels at 44.5 vs. 49.2 previously. The Euro was the weakest currency in the market down over 2% on widening Italian bond yields and EUR/CHF selling as the SNB failed to continue with verbal intervention the market had been expecting. EU Manufacturing PMI slipped further to 49.0 after being revised lower from 49.7 in August. The EUR/USD is down -2.07% currently at 1.4203, after opening the week at 1.4497.

The Japanese Yen the USD/JPY remained well contained in the Y76.50 - Y77 range with the former FM Noda becoming the new Prime Minister the biggest story. The BOJ is still threatening to intervene and attention will turn to the G7 meeting and whether Japan can gain assistance in coordinated intervention. The USD/JPY is up +0.18% currently at 76.79, after opening at 76.65. The GBP fell against the safe havens in CHF and USD but gained against the EURO. Survey data continues to weaken with manufacturing and construction PMI's falling in August. EUR/GBP has fallen to 0.8750 whilst cable is hoping to find support ahead of 1.6000. The GBP/USD is down -0.93% currently at 1.6212 after opening at 1.6363. The AUD bucked the trend and finished higher on the week although well off the highs of the week. Retail sales on Thursday helped the market break above 1.0700 with July figures at +0.5% vs. -0.1% previously m/m.  A big data week ahead with central bank meeting and jobs data on tap. The AUD/USD is up +0.71% currently at 1.0642 after opening at 1.0566.

The Forex Trading Economic Data Ahead Preview

In the States; On Monday, Labor Day holiday in the US. On Tuesday, August Services ISM forecast at 51.2 vs. 52.7 previously. On Wednesday, Bank of Canada rate decision forecast to hold at 1.0%. On Thursday, Weekly Jobless claims forecast at 410k. Also, July Trade Balance forecast at -50bn vs. -53.1bn previously. Also on Thursday, FED Bernanke Speaks. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Monday, August Final PMI Services forecast at 51.5. July Retail Sales forecast at 0.1% vs. -0.70%. ON Tuesday, Aug CPI forecast at 0.2% vs. 0.5% previously. Q2 Provisional GDP forecast unchanged at 1.7% y/y. On Wednesday, July German Industrial Production forecast at 0.5% vs. -1.1% previously. On Thursday, ECB Rate announcement and Trichet Speech. In the UK, On Monday, August PMI services forecast at 54 vs. 55.4 previously. ON Wednesday, July Induestrial Production forecast at -0.5% vs. -0.3% previously. On Thursday, BOE Rate announcement forecast unchanged at 0.5% and 200bn Asset purchase program. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Wednesday, BOJ Rate Target forecast at 0.1% vs. 0.1% previously. On Thursday, Q2 GDP forecast at -2% vs. -1.3% annualized. In Australia; On Tuesday, RBA Rate announcement forecast at 4.75% vs. 4.75% previously. ON Wednesday, Q2 GDP forecast at 1.0% vs. -1.2% previously. On Thursday, August Employment Change forecast at 10.0k vs. -0.1k previously. August Unemployment Rate forecast at 5.1% unchanged. We will provide our previews and reviews of these data releases in the daily summary.



TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4055

1.4104

1.4155

1.4386

1.4549

USD/JPY

75.95

76.34

76.80

77.02

78.86

GBP/USD

1.6069

1.6111

1.6180

1.6261

1.6334

AUD/USD

1.0419

1.0561

1.0575

1.0765

1.0809

XAU/USD

1783.00

1812

1875

1898

1913

OIL/USD

83.00



85.00

85.80

88.00

89.00



Euro - 1.4155

Initial support at 1.4104 (Aug 11 low) followed by 1.4055 (Aug 5 low). Initial resistance is now located at 1.4386 (Sept 1 high) followed by 1.4549 (Aug 29 high)



Yen - 76.80

Initial support is located at 76.34 (Aug 22 low) followed by 75.95 (Psych level). Initial resistance is now at 77.02 (Aug 29 high) followed by 78.86 (Aug 8 high).

Pound - 1.6180

Initial support at 1.6111 (Aug 11 low) followed by 1.6069 (Jul 20 low). Initial resistance is now at 1.6261 (Sept 1 high) followed by 1.6334 (Aug 31 high).



Australian Dollar - 1.0575

Initial support at 1.0561 (Aug 29 low) followed by the 1.0419 (Aug 26 low). Initial resistance is now at 1.0765 (Sept 1 high) followed by 1.809 (76.4% retrace of 1.1081-0.9928).

Gold - 1875

Initial support at 1812 (Aug 31 low) followed by 1783 (Aug 30 low). Initial resistance is now at 1898 (1462.45 plus 1.618 of 1308.25-1577.57) followed by 1913 (Aug 23 high).



Oil - 85.80

Initial support at 85.00 (Intraday Support) followed by 83.00 (Intraday Support). Initial resistance is now at 88.00 (Intraday resistance) followed by 89.00 (Intraday Resistance).





Written by Anthony Darvall