U.S. Dollar Trading (USD) risk off trading overnight as the US was given a wakeup call from rating agency S&P which put the AAA rating on negative watch implying a 1/3 chance of a downgrade in next 2 years. The US Debt situation and Government fiscal plan are being closely scrutinized. In US stocks, DJIA -140 points closing at 12201, S&P -14 points closing at 1305 and NASDAQ -29 points closing at 2735. Looking ahead, March US Building Permits forecast at 0.55m vs. 0.52m previously. March Housing starts are forecast 0.53m vs. 0.48m previously.
The Euro (EUR) was under heavy selling pressure as the combination of USD strength and the Euro weakness led to large moves. The markets are concerned that Greece debt may be restructured but the Greek Government has firmly denied this. EUR/USD broke under 1.4300 and continued to fall toward breaking under 1.4200 briefly in the US session. Overall the EUR/USD traded with a low of 1.4156 and a high of 1.4407 before closing the day around 1.4230 in the New York session. Looking ahead, April Manufacturing PMI forecast at 57.2 vs. 57.5 previously.
The Japanese Yen (JPY) was the safe haven of choice in the market yesterday with the US downgrade sending investors to push USD/JPY below Y83 to Y82.50 supports. EUR/JPY was the biggest move falling over 3 big figures as risk aversion picked up. Overall the USD/JPY traded with a low of 82.17 and a high of 83.22 before closing the day around 82.55 in the New York session.
The Sterling (GBP) was under pressure falling sharply on the US downgrade and stock market weakness. The GBP/USD had bounced to 1.6300 on the back off EUR/GBP selling but reversed sharply at the big figure. Overall the GBP/USD traded with a low of 1.6164 and a high of 1.6331 before closing the day at 1.6260 in the New York session.
The Australian Dollar (AUD) reacted negatively to the risk aversion and broke below the key 1.0500 level threatening bigger pullbacks in coming days. AUD/JPY selling is beginning to weigh heavy after be a source of solid support in the recent run up to record highs. Overall the AUD/USD traded with a low of 1.0452 and a high of 1.0575 before closing the day at 1.0460 in the New York session.
Oil & Gold (XAU) pushed higher on the US downgrade as sovereign risk supported with the precious metal an alternative investment to currency. Overall trading with a low of USD$1477 and high of USD $1498 before ending the New York session at USD$1495 an ounce. Crude Oil fell back on market wide moves lower in most commodities. WTI Oil Closed -$2.54 at $107.20 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4220
Initial support at 1.4152 (Apr 5 low) followed by 1.4062 (Apr 1 low). Initial resistance is now located at 1.4450 (Apr 18 high) followed by 1.4520 (April 12 high)
Yen - 82.50
Initial support is located at 82.37 (March 30 low) followed by 81.31 (Mar 30 low). Initial resistance is now at 83.27 (Mar 30 low) followed by 83.78 (Apr 15 High).
Pound - 1.6245
Initial support at 1.6227 (April 12 low) followed by 1.6091 (Apr 5 low). Initial resistance is now at 1.6385 (Apr 14 high) followed by 1.6516 (Dec 7 2009 high).
Australian Dollar - 1.0465
Initial support at 1.0390 (Apr 12 low) followed by the 1.0315 (Apr 6 low). Initial resistance is now at 1.0584 (Apr 8 high) followed by 1.0600 (1.0412 plus 1.0289-1.0508).
Gold - 1490
Initial support at 1471 (Apr 15 low) followed by 1452 (Apr 14 low). Initial resistance is now at 1500 (Big Figure Major Resistance) followed by 1513 (1157.03 plus 1.618 of 1044.85-1265.30).
Oil - 107.20
Initial support at 106.00 (Intraday Support) followed by 105.00 (Intraday Support). Initial resistance is now at 108.00 (Intraday resistance) followed by 110.00 (Intraday Resistance).
Written by Anthony Darvall