U.S. Dollar Trading (US) stocks continue to pick up with hurricane Irene avoiding heavy damage and weekend speculation in the press that more FED easing will be on the way if the US economy falters. In US stocks on Friday, DJIA +254 points closing at 11539, S&P +33 points closing at 1210 and NASDAQ +82 points closing at 2562. Looking ahead, August FOMC Minutes. June Case Shiller 0.6% vs. 1% previously.

The Euro (EUR) was mixed with support from strong stocks and talk of a radical recapitalization plan for European banks. This was tempered by talk of political resistance to European bailouts in Germany and Court challenges to the current bailouts proposed. Looking ahead, August Business Climate forecast at 0.15 vs. 0.45 previously.

The Japanese Yen (JPY) the USD/JPY was quiet in the recent range but headed towards Y77 on the back of heavy buying in EUR/JPY and AUD/JPY. The big news in Japan is that Noda may be the new PM and is seen as continuing his current policy towards verbal intervention in the Yen.

The Sterling (GBP) GBP/USD was strong grinding above 1.6400 and gaining against the lackluster Euro. GBP/AUD however fell back to with stock markets proving plenty of support for the high yielding Aussie. Looking ahead, July Mortgage Approvals forecast at 49k vs. 48.4k previously.

The Australian Dollar (AUD) the Aussie broke above 1.0600 in Asia and tracked stocks higher in Europe and the US session to close on a solid footing threatening more gains. The AUD/JPY was strong taking out Y82 and providing plenty of support for the major. UPDATE July Building Permits at 1% vs. -3.5% previously.

Oil & Gold (XAU) Gold slumped through $1800 at the start of the US session before stabilizing at the $1790 level. Crude Oil extended gains to the $87 level with the positive investor mood supporting.

Pairs to watch

XAU/USD can we reclaim $1800oz?

EUR/USD time for a new trend?



TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4226

1.4328

1.4515

1.4578

1.4578

USD/JPY

75.95

76.34

76.95

77.86

78.86

GBP/USD

1.6167

1.6231

1.6410

1.6534

1.6573

AUD/USD

1.0246

1.0387

1.0670

1.0700

1.0786

XAU/USD

1681.00

1757

1785

1833

1853

OIL/USD

83.00



85.00

87.75

88.00

90.00



Euro - 1.4515

Initial support at 1.4328 (Aug 22 low) followed by 1.4226 (Aug 15 low). Initial resistance is now located at 1.4578 (Jul 4 high) followed by 1.4697 (Jun 7 high)



Yen - 76.95

Initial support is located at 76.34 (Aug 22 low) followed by 75.95 (Psych level). Initial resistance is now at 77.86 (Aug 9 high) followed by 78.86 (Aug 8 high).

Pound - 1.6410

Initial support at 1.6231 (76.4% retrace of 1.6111-1.6618) followed by 1.6167 (Aug 12 low). Initial resistance is now at 1.6534 (Aug 24 high) followed by 1.6573 (Aug 23 high).



Australian Dollar - 1.0670

Initial support at 1.0387 (Aug 23 low) followed by the 1.0246 (Aug 12 low). Initial resistance is now at 1.0700 (Psych level) followed by 1.0786 (Aug 3 High).

Gold - 1785

Initial support at 1757 (Aug 26 low) followed by 1702 (Aug 12 low). Initial resistance is now at 1833 (61.8% retrace of 1913.540-1704.25) followed by 1853 (Aug 24 high).



Oil - 87.75

Initial support at 85.00 (Intraday Support) followed by 83.00 (Intraday Support). Initial resistance is now at 88.00 (Intraday resistance) followed by 90.00 (Intraday Resistance).





Written by Anthony Darvall