CURRENCY TRADING SUMMARY - 26th August (00:30 GMT)
Written by Anthony Darvall
U.S. Dollar Trading (USD) when US data missed expectations once again the stock markets fell but support was found and a sharp rally was seen in the US close. July New Home Sales dropped -12.4% to 0.276m vs. 0.33m forecast. In US stocks, DJIA +19 points closing at 10060, S&P +3 points closing at 1054 and NASDAQ +17 points closing at 2141. Looking ahead, Weekly Jobless Claims are forecast at 490k vs. 500k previously.
The Euro (EUR) was supported via solid German IFO Business climate at 106.7 vs. 106.2 previously and dips were bought to keep EUR/USD roughly unchanged on the day. EUR/JPY tested fresh lows but also about faced on the relief rally. EUR/USD traded with a low of 1.2607 and a high of 1.2728 before closing at 1.2665. Looking ahead, September Consumer Confidence is forecast at 4 vs. 3.9 previously.
The Japanese Yen (JPY) dipped on weak US data but the market is oversold and ready for a relief rally back towards Y85. EUR/JPY and AUD/JPY bounced as well into the US close. The BOJ is steeping up rhetoric but the market is not convinced physical intervention will occur. Overall the USDJPY traded with a low of 84.02 and a high of 84.85 before closing the day around 84.70 in the New York session.
The Sterling (GBP) dips below 1.5400 were bought and the market rallied in the US session on profit taking and solid GBP/JPY buying. The bounce was limited though and the trend is still down for the time being without some catalyst to prompt buyers back above 1.5500. Overall the GBP/USD traded with a low of 1.5387 and a high of 1.5484 before closing the day at 1.5470 in the New York session. August CBI Distributive Trades are forecast at 20 vs. 33 previously.
The Australian Dollar (AUD) hit month lows at the start of the US session but support was strong below the figure and was able to rally back to the mid 0.8850 region. The risk sensitive currency is linked to the stock markets and respective movements. Overall the AUD/USD traded with a low of 0.8794 and a high of 0.8897 before closing the US session at 0.8855. UPDATE Q2 Capex -4% vs. 2% forecast.
Oil & Gold (XAU) traded at fresh months highs to finish above $1240. Overall trading with a low of USD$1229 and high of USD $1241 before ending the New York session at USD$1240 an ounce. Oil bounced with the rest of the market after falling close to the $70 a barrel level. WTI Oil Closed +$0.90 at $72.50 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.2685
Initial support at 1.2604 (61.8% retrace of 1.2152-1.3334) followed by 1.2523 (July 13 low). Initial resistance is now located at 1.2730 (Aug 23 low) followed by 1.2933 (August 6 high)
Yen - 84.50
Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.20 (August 24 high) followed by 86.38 (July 28 high).
Pound - 1.5490
Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5518 (August 24 high) followed by 1.5713 (Aug 12 high).
Australian Dollar - 0.8855
Initial support at 0.8781 (38.2% retrace of 0.8067-0.9222) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9080 (August 17 high) followed by 0.9222 (Aug 6 high).
Gold - 1239
Initial support at 1210 (Aug 13 low) followed by 1190 (Aug 10 low). Initial resistance is now at 1247 (June 30 high) followed by 1265 (June 21 high).
Oil - 72.80
Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).