U.S. Dollar Trading (US) the risk recovery continued with consensus growing that Greece will be supported in by other EU members. US house prices continued to be depressed with July Case Shiller -4.1% y/y slightly better than the -4.4% y/y expected. In US stocks, DJIA +146 points closing at 11190, S&P +12 points closing at 1175 and NASDAQ +30 points closing at 2546. Looking ahead, August Durable Goods Orders forecast at 0.0 vs. 4.1% previously m/m.
The Euro (EUR) the EUR/USD broke above 1.3600 as the market reacted to positive news of support for Greece from other EU member states and talk the ESFS will be expanded continued aiding the relief rally. From the Greece side news that the property tax had passed in parliament also helped sentiment. Looking ahead, August German Import -0.4% vs. 0.8% previously.
The Japanese Yen (JPY) the Yen was sold in the risk on environment with EUR/JPY leading the crosses and the major higher. USD/JPY found resistance just under Y77 and EUR/JPY tested Y105 before easing back late in the day on talk of a split between EU countries on the size of the Greece debt haircut to be paid for by private bondholders.
The Sterling (GBP) with little data the Pound took its cue from the Eurozone news and rallied in sympathy back above 1.5700 on the major. The outlook is largely determined by day to day risk sentiment so watching stock market indexes is key to catch direction.
The Australian Dollar (AUD) the market catapulted towards the critical parity level at 1.0000 but the stock market spike ran out of steam and when profit taking started late in the US session we saw the AUD/USD come off sharply. AUD/JPY supported as the key cross moved higher to Y76.70 up over 300 pips from Monday's low.
Oil & Gold (XAU) Gold's rally continued with day highs at the start of the US session towards $1677 for another $50 gain from the Asian open. Crude Oil enjoyed its best day this month gaining over 5% at one stage above $84.50.
Pairs to watch
EUR/USD are all the EU countries on the same page?
XAU/USD is Monday's lows the bottom of the recent correction?
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3580
Initial support at 1.3479 (Sept 27 low) followed by 1.3356 (76.4% retrace of 1.2867-1.4940). Initial resistance is now located at 1.3718 (61.8% retrace of 1.3937-13363) followed by 1.3797 (Sept 21 high)
Yen - 76.50
Initial support is located at 75.95 (Aug 19 low) followed by 75.00 (Psych Support). Initial resistance is now at 77.00 (Sep 19 high) followed by 77.28 (Aug 13 high).
Pound - 1.5635
Initial support at 1.5526 (Sept 27 low) followed by 1.5433 (Sep 26 low). Initial resistance is now at 1.5781 (Jul 12 high) followed by 1.5821 (38.2% retrace of 1.6618-1.5328).
Australian Dollar - 0.9890
Initial support at 0.9777 (Sep 27 low) followed by the 0.9622 (Sep 26 low). Initial resistance is now at 1.0080 (Sep 22 high) followed by 1.0194 (50% retrace of 1.0765-0.9622).
Gold - 1638
Initial support at 1615 (Sep 27 low) followed by 1532 (Sep 26 low). Initial resistance is now at 1704 (Aug 25 high) followed by 1754 (50% retrace of 1921.15-1532.72).
Oil - 83.75
Initial support at 80.00 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at 85.00 (Intraday resistance) followed by 86.00 (Intraday Resistance).
Written by Anthony Darvall