U.S. Dollar Trading (US) the Dollar gained well supported on risk aversion from stocks falling heavily after weak US jobs data. August Non Farm Payrolls came in at 0 vs. 75k forecast. The August Unemployment Rate stayed at 9.1%. Gold soared on expectations that QE3 will now be implemented on a faltering US economy. In US stocks on Friday, DJIA -253 points closing at 11240, S&P -30 points closing at 1173 and NASDAQ -65 points closing at 2480. Looking ahead, US HOLIDAY THIN TRADING CONDITONS
The Euro (EUR) the Euro remained under constant pressure with EU debt concerns compounded by risk aversion in the US to push the EUR/USD back under 1.4200. The outlook is weak for the other safe haven crosses with lots of selling pressure on EUR/JPY and EUR/CHF. Looking ahead, August PMI Services forecast at 51.5.
The Japanese Yen (JPY) Tested support at Y76.50 after the weak US Jobs data but this level held and we saw short covering into the close. The market is cautious of heavy selling with the new PM Noda potentially intervening to sure up his political support. Reports over the weekend that he will bring up the Yen strength at the next G7 meeting.
The Sterling (GBP) The GBP/USD fell in 'risk off' trading but support was seen from EUR/GBP which continue to fall back to 0.8750. A weak construction PMI and drop below 1.6000 this week could lead to a new downtrend for Cable which has range traded for many months. Looking ahead, August Services PMI forecast at 54.3 vs. 55.4 previously.
The Australian Dollar (AUD) the Aussie came under pressure on AUD/JPY selling with US stocks but the major held at the 1.0640 supports. A big week of data ahead could cause plenty of trading opportunities with RBA Interest rate meeting and Jobs data. The recent rally could be pared back if stock market losses continue to mount in the US and Europe as well.
Oil & Gold (XAU) Gold Soared 3% on QE3 talk after weak US jobs data with the precious metal back to the $1880 level. Crude Oil fell heavily to $85 in a post jobs meltdown.
Pairs to watch
EUR/USD will the market test 1.4000 on EU debt concerns?
XAU/USD will the recent $1915 all-time high be retested?
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.4155
Initial support at 1.4104 (Aug 11 low) followed by 1.4055 (Aug 5 low). Initial resistance is now located at 1.4386 (Sept 1 high) followed by 1.4549 (Aug 29 high)
Yen - 76.80
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 - 1.6180
Initial support at 1.6111 (Aug 11 low) followed by 1.6069 (Jul 20 low). Initial resistance is now at 1.6261 (Sept 1 high) followed by 1.6334 (Aug 31 high).
Australian Dollar - 1.0575
Initial support at 1.0561 (Aug 29 low) followed by the 1.0419 (Aug 26 low). Initial resistance is now at 1.0765 (Sept 1 high) followed by 1.809 (76.4% retrace of 1.1081-0.9928).
Gold - 1875
Initial support at 1812 (Aug 31 low) followed by 1783 (Aug 30 low). Initial resistance is now at 1898 (1462.45 plus 1.618 of 1308.25-1577.57) followed by 1913 (Aug 23 high).
Oil - 85.80
Initial support at 85.00 (Intraday Support) followed by 83.00 (Intraday Support). Initial resistance is now at 88.00 (Intraday resistance) followed by 89.00 (Intraday Resistance).
Written by Anthony Darvall