Currency Tech

EURUSD
R 2: 1.3428
R 1: 1.3369
CURRENT: 1.3108
S 1: 1.3020
S 2: 1.2950

USDJPY
R 2: 87.20
R 1: 86.80
CURRENT: 85.25
S 1: 85.00
S 2: 84.50

GBPUSD
R 2: 1.6171
R 1: 1.6067
CURRENT: 1.5813
S 1: 1.5750
S 2: 1.5680

AUDUSD
R 2: 0.9325
R 1: 0.9200
CURRENT: 0.9078
S 1: 0.9000
S 2: 0.8925

Market Brief

The JPY rose to a two-week high against the EUR, and the USD gained, as signs the global economic recovery is waning boosted demand for safer assets after the Federal Reserve said the US recovery will be slower than expected and reports today showed UK consumer confidence dropped and Japan's machine orders rose less than analysts forecast. AUDUSD weakened for a third day after China said industrial output grew at the slowest pace in 11 months, spurring investors to sell higher- yielding assets.

The EURJPY dropped to 111.97 after falling to 111.70, the weakest since July 23, EURUSD dropped to 1.3122, GBPUSD declined 0.3% to 1.5809 and the USDJPY traded at 85.34. The Fed said in its policy statement yesterday the pace of economic recovery is likely to be more modest in the near term than had been anticipated leaving the interest rate in a range of 0% - 0.25%, where it's been since December 2008.

Gains in the USD were tempered after the Fed also said yesterday it will reinvest principal payments on its mortgage holdings into longer-maturity Treasuries to help keep borrowing costs low. Japan's machinery orders rose 1.6% (exp. 5.4%) less than forecast and the MSCI Asia Pacific Index dropped for a third day, losing 1%.Australia's dollar fell against most of the currencies after China said factory output, retail sales and new lending for investment in fixed assets all slowed, adding to evidence growth is cooling in China. With the outlook for the US and Chinese economies becoming uncertain, growth-sensitive currencies are unlikely to draw strong buying interest.

China's industrial output rose 13.4% in July from a year earlier, the least since August 2009 while retail sales growth slowed to an annual 17.9% (prev. 18.3%). AUDUSD fell 0.5% to 0.9086 and AUDJPY dropped 0.7% to 77.51. The GBPUSD declined for a third day as the BOE will probably lower its forecasts for 2011 economic growth in its quarterly inflation report today and as UK consumer confidence index slumped 7 points to 56 in July, the lowest since April 2009.

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