U.S. Dollar Trading (USD) the on going sovereign debt crisis continued to dominate of the FX market. Concerns on Friday were on rumors of an EU breakup and France downgrade. No matter how truthful the rumors are, the damage was done and sentiment remains fragile. April Retail Sales were solid at 0.4% m/m. In US stocks, DJIA -162 points closing at 10620, S&P -21 points closing at 1135 and NASDAQ -47 points closing at 2346. Looking ahead, May NY FED is forecast at -32 vs. -36 previously.
The Euro (EUR) the slump accelerated and the pair broke through 1.2500 and 1.2400 as sentiment deteriorated. Markets noted that Core Spanish Inflation turned -0.1% y/y as austerity measures hurt prices. EUR/GBP is also under pressure but Cable selling is picking up and offering some protection. EUR/USD traded with a low of 1.2359 and a high of 1.2575 before closing at 1.2380.
The Japanese Yen (JPY) was buoyant like the Dollar on Safe haven demand. USD/JPY struggled as EUR/JPY selling intensified in Europe and not even solid US data allowed much support. GBP/JPY and AUD/JPY selling also added to the Yen strength. Overall the USDJPY traded with a low of 91.80 and a high of 93.10 before closing the day around 92.25 in the New York session. UPDATE March Machinery Orders up 5.4% m/m.
The Sterling (GBP) came under pressure as the media reported concerns about the ability of the new coalition government to reign in spending and how this would affect GDP. The European Debt concerns could easily migrate across the channel and pull the UK into it's own debt crisis. Overall the GBP/USD traded with a low of 1.4497 and a high of 1.4638 before closing the day at 1.4536 in the New York session.
The Australian Dollar (AUD) was under pressure due to weak stocks and AUD/JPY selling but held up better than most as EUR/AUD selling supported the commodity currency. The Canadian dollar was the hardest hit however as Oil continued falling faster than metals. Overall the AUD/USD traded with a low of 0.8852 and a high of 0.8973 before closing the US session at 0.8854.
Oil & Gold (XAU) tested $1150 before slumping back to $1120 on profit taking in the US session. Overall trading with a low of USD$1217 and high of USD$1250 before ending the New York session at USD$1236 an ounce. Oil continued to crash on European demand concerns. WTI Oil Closed -$2.79 at $71.60 a barrel.
Euro - 1.2360
Initial support at 1.2330 (October 28 2008 low) followed by 1.2102 (April 2006 low). Initial resistance is now located at 1.2747 (May 12 high) followed by 1.2818 (May 11 high)
Yen - 92.25
Initial support is located at 91.52 (0.382 of 88.26-93.54) followed by 90.28 (0.618 of 88.26-93.54). Initial resistance is now at 94.19 (May 6 low) followed by 94.99 (May 5 high).
Pound - 1.4510
Initial support at 1.4477 (May 7 low) followed by 1.4398 (April 22 2009 low). Initial resistance is now at 1.4918 (May 13 High) followed by 1.5068 (May 5 low).
Australian Dollar - 0.8840
Initial support at 0.8716 (Mar 6 low) followed by the 0.8579 (Feb 2 low). Initial resistance is now at 0.9136 (April 28 low) followed by 0.9275 (May 4 high).
Gold - 1233
Initial support at 1198 (May 11 low) followed by 1171 (May 6 low). Initial resistance is now at 1250 (Key level) followed by 1261 (1123.90 plus 1.618 of 1085.3-1170.1).
Oil - 71.50
Initial support at 70.00 (Intraday Support) followed by 68.50 (Intraday Support). Initial resistance is now at 72.50 (March high) followed by 75.00 (Intraday Resistance).