Optimism continues to grow

on May 06 2009 12:23 PM

Last week’s currency trading review

 

The Dollar came under pressure this week as stock markets continued to push for fresh highs and dips were well supported. USD/JPY showed life and provided most of week’s major moves. Economic data continued to beat forecasts, with ISM manufacturing forecast at 40.2 vs. 36.3 previously and CB Consumer confidence at 39.2 vs. 26.9 previously. Q1 GDP was terrible but encouraging for the bulls was the -6.1% y/y print was shrugged off in the equity markets. The FOMC held at 0.25% and was more optimistic than previously in the accompanying statement. The Euro made small gains although pushes into the 1.33’s found a lot of resistance. The EUR/USD gain 0.2% closing at 1.3268, after opening the week at 1.3241. The Japanese Yen weakened across the board to nearly make up for the large losses sustained the week before. 100 is still the Key level although some of the crosses are also near very solid resistances. The USD/JPY gained 2.0% closing at 99.12 after opening at 100.41. The GBP surged off 1.4500 as the market regrouped for another rally. Ongoing Concern about the UK debt level is hampering the quest for 1.5000. EUR/GBP and GBP/JPY are beginning to express bullish technical and may help the Pound continue its rally. The GBP/USD gained 1.64% closing at 1.4916 after opening at 1.4672. The AUD hit New Year highs on Thursday as the AUD continued to rebound from effects of the Global Financial Crisis. Ahead, concern about the domestic economy are still present and may undermine the currency’s recent rally. Large resistance is noted at 0.7500 and 0.7700. The AUD/USD closed up 0.96% at 0.7300 after opening at 0.7230.

                                                      

The forex trading week preview

 

In the States; big data week with the April Non farm Payrolls the highlight on Friday. On Monday we have March Pending Home Sales forecast flat vs. 2.1% previously. On Tuesday Non Manufacturing ISM is forecast at 42 vs. 40.8 previously. On Wednesday we step up the pace with ADP Private Employment report forecast at -645K vs. -742K previously. On Thursday, Weekly jobless claims are forecast 635K vs. 631K previously. On Friday, Non Farm Payrolls are forecast at -610K vs. -663k previously. The April Unemployment Rate is forecast at 8.9% vs. 8.5% previously. We will provide our previews and reviews of these data releases in the daily summary.

       

In the Eurozone; Wednesday we see EU Retail Sales forecast at 0.1% vs. -0.6% previously.  On Thursday we have ECB meeting forecast at 1.0% vs. 1.25% previously. On Friday we have German Industrial Production forecast at -1.3% vs. -2.9% previously.  In the UK; On Wednesday we have April PMI services forecast at 46.2 vs. 45.5 previously. On Thursday we have BOE rate announcement forecast to remain at 0.5%. We will provide our previews and reviews of these data releases in the daily summary.

                                         

In Japan; Holiday on Monday-Wednesday before BOJ Releases Minutes on Thursday. We will provide our previews and reviews of these data releases in the daily summary.

 

In Australia; On Tuesday we have RBA meeting expected to hold at 3.0%.  On Thursday we have New Zealand Unemployment (Q1) forecast at 5.3% vs. 4.7% previously. Also Thursday, Australian Unemployment forecast at 5.9% vs. 5.7%. On Friday, RBA Quarterly Monetary Policy Statement. We will provide our previews and reviews of these data releases in the daily summary.

 

TECHNICAL COMMENTARY

 

Currency
Sup 2
Sup 1
Spot
Res 1
Res 2

EUR/USD
1.2964
1.3121
1.3275
1.3392
1.3420

USD/JPY
96.39
97.15
99.30
99.75
100.43

GBP/USD
1.4609
1.4704
1.4925
1.4947
1.5068

AUD/USD
0.6954
0.7049
0.7335
0.7384
0.7738

XAU/USD
864.00
878.00
887.00
906.00
918.00

 

 

·         Euro – 1.3275

Initial support at 1.3121 (Apr 29 low) followed by 1.2964 (Apr 28 low). Initial resistance is now located at 1.3392 (April 13 high) at followed by 1.3420 (Apr 7 high)

 

·         Yen – 99.75

Initial support is located at 97.15 (Apr 30 low) followed by 96.39 (Apr 29 low). Initial resistance is now at 99.75 (Apr 17 high) followed by 100.43 (Apr 14 high).

 

·         Pound – 1.4925

Initial support at 1.4704 (Apr 30 low) followed by 1.4609 (Apr 27 low). Initial resistance is now at 1.4947 (Apr 30 high) followed by 1.5068 (Apr 30 high).

 

·         Australian Dollar – 0.7335

Initial support at 0.7049 (Apr 29 low) followed by the 0.6954 (Apr 20 low). Initial resistance is now at 0.7384 (Apr 30 high) followed by 0.7738 (Oct 6 high).

 

·         Gold – 887

Initial support at 878 (Apr 21 low) followed by 864 (Apr 17 low). Initial resistance is now at 906 (Apr 28 high) followed by 918 (Apr 27 high).

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