U.S. Dollar Trading (US) risk remained off overnight as the market waited for news regarding the US debt ceiling negotiations which have stalled. US data was strong with June Pending Home Sales rising +2% vs. -2% forecast. Weekly Jobless claims fell below the psychological level of 398k vs. 418k previously. In US stocks, DJIA -62 points closing at 12240, S&P -4 points closing at 1300 and NASDAQ +1 points closing at 2766. Looking ahead, Q2 GDP forecast at 0.1% vs. 0.0% previously. July Michigan Consumer Confidence forecast at 64 vs. 63.8.

The Euro (EUR) concerns about the EU debt crisis continue to remain close to the surface with concern overnight after weak Italy bonds. German Unemployment fell 11k in July vs. -13k previously. The major found support under 1.4300. The EUR/USD traded with a low of 1.4253 and a high of 1.4401 before closing the day around 1.4320 in the New York session. Looking ahead, July Inflation forecast at 2.7%.June German Retail Sales forecast at 1.6% vs. -2.8%.

The Japanese Yen (JPY) failed to regain Y78 even with some moderate USD strength and ended near lows with crosses dragging the major lower. EUR/JPY tracked towards Y110 the low from the recent Greece crisis. Overall the USD/JPY traded with a low of 77.61 and a high of 78.04 before closing the day around 77.70 in the New York session. UPDATE June CPI at 0.4% y/y.

The Sterling (GBP) outperformed most other risk currencies finding support under 1.6300 and EUR/GBP falling to 0.8750. CBI Realized Sales at -5 vs. 0 forecast UK economy struggling to gain traction. Overall the GBP/USD traded with a low of 1.6292 and a high of 1.6385 before closing the day at 1.6330 in the New York session. Looking ahead, June Nationwide House Prices forecast at 0.2% vs. 0.0% previously.

The Australian Dollar (AUD) failed to maintain strength as the risk aversion overwhelmed and pushed the Aussie back from fresh record highs to test 1.1000. The New Zealand Dollar has similar movements trading at record highs after the RBNZ rate meeting came out with hawkish comments that brought forward interest rate hike expectations. Overall the AUD/USD traded with a low of 1.0974 and a high of 1.1077 before closing the day at 1.1010 in the New York session.

Oil & Gold (XAU) Dipped but was well support and finished at opening levels. Overall trading with a low of USD$1602 and high of USD $1620 before ending the New York session at USD$1616 an ounce. Oil was Stable closing at opening levels. WTI Oil Closed +$0.04 at $97.44 a barrel.



TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4134

1.4187

1.4315

1.4578

1.4653

USD/JPY

76.61

77.39

77.60

78.02

79.32

GBP/USD

1.6121

1.6262

1.6340

1.6473

1.6547

AUD/USD

1.0796

1.0944

1.0975

1.1198

1.1464

XAU/USD

1584.00

1599

1618

1628

1632

OIL/USD

95.00



97.00

97.15

98.00

100.00



Euro - 1.4315

Initial support at 1.4187 (50% retrace of 1.3837-1.4536) followed by 1.4134 (Jul 20 low). Initial resistance is now located at 1.4578 (Jul 4 high) followed by 1.4653 (Jul 5 high)



Yen - 77.60

Initial support is located at 77.39 (81.48 minus 1.618 of 82.23-79.70) followed by 76.61 (79.60 minus 81.48-78.47). Initial resistance is now at 78.02 (Jun 27 high) followed by 79.32 (Jul 20 high).

Pound - 1.6340

Initial support at 1.6262 (Jul 25 low) followed by 1.6121 (Jul 20 low). Initial resistance is now at 1.6473 (Jun 7 high) followed by 1.6547 (May 31 high).



Australian Dollar - 1.0975

Initial support at 1.0944 (Jul 27 low) followed by the 1.0796 (Jun 25 low). Initial resistance is now at 1.1198 (1.0391 plus 0.618 of 0.9706-1.1012) followed by 1.1464 (0.8067 plus 0.9406-0.6009).

Gold - 1618

Initial support at 1599 (Jul 25 low) followed by 184 (Jul 22 low). Initial resistance is now at 1628 (1462.45 plus 0.618 of 1308.25-1577.57) followed by 1632 (1608.10 plus 0.618 of 1624.07-1584.23).



Oil - 97.15

Initial support at 97.00 (Intraday Support) followed by 95.00 (Intraday Support). Initial resistance is now at 98.00 (Intraday resistance) followed by 100.00 (Intraday Resistance).





Written by Anthony Darvall