US Data holds up, Stocks Up
U.S. Dollar Trading (US) smaller than expected declines in the US August Chicago PMI at 56.5 vs. 53.5 forecast has led to many suggesting the US Manufacturing PMI will not be as bad as expected. ADP Employment change at 91k vs. 102k forecast. In US stocks on Friday, DJIA +53 points closing at 11613, S&P +5 points closing at 1218 and NASDAQ +3 points closing at 2579. Looking ahead, Jobless Claims are forecast at 410k vs. 417k previously.
The Euro (EUR) continued easing throughout the day with more negativity seen on the back of European bank capital concerns and Greek recession worries clouding the outlook. German Unemployment change was -8k vs. -10k previously. Support was found at 1.4350 but sentiment is fragile. Looking ahead, August PMI Manufacturing forecast at 49.7.
The Japanese Yen (JPY) USD/JPY bounced off Y86.50 on the stronger than expected US data but the movement is nothing aggressive. EUR/JPY and GBP/JPY is under pressure with a grind lower in the last 3 days. The market is now waiting for the US jobs data for fresh direction.
The Sterling (GBP) selling throughout the day in sympathy with the Euro and broke under 1.6300 to find support at 1.6240. The EUR/GBP is very tight at 0.8850 and shows the close correlation the Pound is having with the single currency lately. GBP/CHF is another source of weakness with the strong pullback overnight adding pressure. Looking ahead, August HPO forecast at 0.0% vs. 0.2% previously.
The Australian Dollar (AUD) the Aussie was once again of the best performing currencies in the market once again tracking stock markets higher. GBP/AUD and EUR/AUD has resumed its downtrend after a major rally in the first two weeks of the month and are threatening to head back to their respective all time lows at a 1.48 and 1.29.
Oil & Gold (XAU) Gold Stalled at $1840 before pulling back to opening levels. Crude found support under $88 and close back above in quiet trade.
Pairs to watch
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|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4355
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 - 76.85
Initial support is located at 76.34 (Aug 22 low) followed by 75.95 (Psych level). Initial resistance is now at 77.02 (Aug 29 high) followed by 78.86 (Aug 8 high).
Pound - 1.6235
Initial support at 1.6208 (Aug 26 low) followed by 1.6167 (Aug 12 low). Initial resistance is now at 1.6420 (Aug 30 high) followed by 1.6573 (Aug 23 high).
Australian Dollar - 1.0675
Initial support at 1.0521 (Aug 29 low) followed by the 1.0419 (Aug 26 low). Initial resistance is now at 1.0700 (Psych level) followed by 1.0786 (Aug 3 High).
Gold - 1826
Initial support at 1783 (Aug 30 low) followed by 1757 (Aug 26 low). Initial resistance is now at 1853 (Aug 24 high) followed by 1913 (Aug 23 high).
Oil - 88.70
Initial support at 88.00 (Intraday Support) followed by 87.00 (Intraday Support). Initial resistance is now at 90.00 (Intraday resistance) followed by 92.50 (Intraday Resistance).
Written by Anthony Darvall