U.S. Dollar Trading (US) most markets remained quiet overnight with the highlight the Swiss national bank's lack of Currency intervention which sent EUR/CHF from 115 to 112. Stocks in the US ended unchanged with an early rally pared back into the close. In US stocks on Friday, DJIA +4 points closing at 11410, S&P +1 points closing at 1193 and NASDAQ -11 points closing at 2511. Looking ahead, August Philly FED forecast at 3.7 vs. 3.2 previously.
The Euro (EUR) the Euro fell to 1.4350 on sharp EUR/CHF selling post SNB but then found support to continue its rally for another day to 1.4500. The Euro failed to hold onto these gains though and pulled back into the US close. July CPI dropped further to 1.3% vs. 1.6% previously and takes pressure off the ECB to raise rates.
The Japanese Yen (JPY) USD/JPY refused to move out of the stranglehold of the recent 5 trading days with only the crosses showing signs of life. AUD/JPY tested Y81 and EUR/JPY tested Y111 but was able to break these resistances and fell back with US stocks into the close. The BOJ Governor Noda continues to comment daily that the central bank will intervene if the currency moves too quickly.
The Sterling (GBP) was the most volatile currency in the market after spiking lower on the BOE Minutes which showed a change to 9-0 with the 2 members calling for rate hikes in recent months changing their decisions to a hold. The market bought aggressively on the dip however and surged to week highs above 1.6500. Looking ahead, July Retail Sales forecast at 0.3% vs. 0.7% previously.
The Australian Dollar (AUD) the Aussie extended gains to test 1.0600 before easing into the close. Strong commodities and improving risk appetite is providing a supportive underpin for the Aussie which is a favorite of traders who track stock markets.
Oil & Gold (XAU) Gold is grinding higher as investment demand overwhelmed profit takers. It has been the perfect environment for the precious metal lately with a weak USD and sovereign debt crisis. Crude Oil surged higher but found resistance at $89 and pulled back to the familiar $87 level.
Pairs to watch
AUD/USD stocks ready to pull back as rally runs out of steam?
XAU/USD within striking distance of all time highs at $1815
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4395
Initial support at 1.4226 (Aug 15 low) followed by 1.4150 (Aug 12 low). Initial resistance is now located at 1.4536 (Jul 27 high) followed by 1.4697 (Jun 7 high)
Yen - 76.60
Initial support is located at 76.25 (Mar 15 low) followed by 75.00 (Psych level). Initial resistance is now at 77.31 (Aug 10 high) followed by 78.47 (Aug 8 high).
Pound - 1.6510
Initial support at 1.6323 (Aug 16 low) followed by 1.6256 (Aug 15 low). Initial resistance is now at 1.6547 (May 31 high) followed by 1.6661 (May 3 high).
Australian Dollar - 1.0510
Initial support at 1.0406 (Aug 16 low) followed by the 1.0331 (Aug 15 low). Initial resistance is now at 1.0641 (61.8% retrace of 1.1081-0.9928) followed by 1.0786 (Aug 3 high).
Gold - 1790
Initial support at 1732 (Aug 11 low) followed by 1702 (Aug 9 low). Initial resistance is now at 1800 (Pysch level) followed by 1815 (Aug 10 high).
Oil - 87.20
Initial support at 87.00 (Intraday Support) followed by 85.00 (Intraday Support). Initial resistance is now at 89.00 (Intraday resistance) followed by 90.00 (Intraday Resistance).
Written by Anthony Darvall