CURRENCY TRADING SUMMARY - 25th August (00:30 GMT)
Written by Anthony Darvall
U.S. Dollar Trading (USD) had a volatile trading day with USD strength on the back of risk aversion in Europe reversed as US housing data weakened further. July Existing Home Sales fell 27% as the effect of the removal of the housing credit continues to be felt. In US stocks, DJIA -133 points closing at 10040, S&P -15 points closing at 1051 and NASDAQ -35 points closing at 2123. Looking ahead, July Durable Goods are forecast at 2.8% vs. -1.2% previously. Also released, July New Home Sales are forecast to remain at 0.33mn.
The Euro (EUR) tested 1.2600 as EUR/JPY followed USD/JPY to fresh decade lows and stock markets around the globe fell. Some weak US data allowed a bounce to 1.2700 but a S&P downgrade of long term debt from Ireland sent the Euro lower in late US trade. EUR/USD traded with a low of 1.2586 and a high of 1.2721 before closing at 1.2660. Looking ahead, German IFO Business Climate forecast at 105.7 vs. 106.2 previously
The Japanese Yen (JPY) the market finally broke through Y85 to fresh 15 year lows below Y84.70 and tested Y84 quickly on massive stoploss selling. EUR/JPY and AUD/JPY also broke key levels and the market will be closely watching the reaction from the BOJ today in Asia. Overall the USDJPY traded with a low of 83.57 and a high of 85.18 before closing the day around 84.40 in the New York session.
The Sterling (GBP) support at 1.5500 gave way and heavy GBP/JPY selling pushed the pair to month lows at 1.5370. The other big move came in the EUR/GBP which rallied to above 0.8200. Overall the GBP/USD traded with a low of 1.5370 and a high of 1.5508 before closing the day at 1.5430 in the New York session.
The Australian Dollar (AUD) tracked stock markets lower to test 0.8800 support in the US session. The outlook for the AUD is darkening as the global recovery story comes under pressure. AUD/JPY broke under Y75 support and quickly plunged to Y73.60. Overall the AUD/USD traded with a low of 0.8794 and a high of 0.8908 before closing the US session at 0.8855.
Oil & Gold (XAU) picked up in volatility falling over $15 an ounce before rally aggressively on USD weakness post Housing data. Overall trading with a low of USD$1209 and high of USD $1235 before ending the New York session at USD$1230 an ounce. Oil came under heavy pressure heading towards the key $70 level. WTI Oil Closed -$1.47 at $71.63 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.2660
Initial support at 1.2604 (61.8% retrace of 1.2152-1.3334) followed by 1.2523 (July 13 low). Initial resistance is now located at 1.2730 (Aug 23 low) followed by 1.2933 (August 6 high)
Yen - 84.45
Initial support is located at 84.16 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.20 (August 24 high) followed by 86.38 (July 28 high).
Pound - 1.5425
Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5518 (August 24 high) followed by 1.5713 (Aug 12 high).
Australian Dollar - 0.8855
Initial support at 0.8781 (38.2% retrace of 0.8067-0.9222) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9080 (August 17 high) followed by 0.9222 (Aug 6 high).
Gold - 1231
Initial support at 1210 (Aug 13 low) followed by 1190 (Aug 10 low). Initial resistance is now at 1244 (July 1 high) followed by 1265 (June 21 high).
Oil - 71.80
Initial support at 71.00 (Intraday Support) followed by 70.00 (Intraday Support). Initial resistance is now at 72.50(Intraday Resistance) followed by 75.00 (Intraday Resistance).