CURRENCY TRADING SUMMARY - 21st May
U.S. Dollar Trading (USD) was extremely volatile against all currencies as safe haven demand was countered by intervention talk to stem the speed of losses. Weekly Jobless Claims were overlooked but weak at 471k vs 440k forecast. Stock losses accelerated towards the end of the US session as panic selling took over. In US stocks, DJIA -376 points closing at 10068, S&P -43 points closing at 1071 and NASDAQ -94 points closing at 2204.
The Euro (EUR) rallied hard in NY on suspected central bank intervention in the EUR/CHF. The EUR/USD rallied to 1.2600 and the EUR/CHF towards 1.4450. EU Consumer Confidence fell to -18 vs. -15 in May. EUR/USD traded with a low of 1.2295 and a high of 1.2599 before closing at 1.2540. Looking ahead, Q1 GDP Final forecast unchanged at 0.2%. German IFO forecast at 101.9 vs. 101.6 previously.
The Japanese Yen (JPY) USD Broke through Y90 at the height of the US Stock Market losses before stabilizing at Y89. AUD/JPY was the biggest mover last night down near 8% after panic selling sent the Aussie into freefall. EUR/JPY traded briefly below Y110 but bounced well with the EUR/CHF rally supporting. Overall the USDJPY traded with a low of 88.95 and a high of 91.90 before closing the day around 89.60 in the New York session. Looking ahead, BOJ Rate Meeting forecast to remain at 0.1%
The Sterling (GBP) Enjoyed the benefits of the Euro rally shrugging off the risk aversion to a certain extent. GBP/JPY selling did see the pair break below Y130. April Retail Sales were at 0.3% vs. 0.2% forecast. Overall the GBP/USD traded with a low of 1.4227 and a high of 1.4463 before closing the day at 1.4380 in the New York session. Looking ahead, April PSNCR forecast at 11bn vs. 23.5bn previously.
The Australian Dollar (AUD) was hammered in trade nearly all day with stops hit under 0.8300 and 0.8200 and 0.8100. The market is extremely nervous and the volatility is keeping support limited and talk is that the RBA may have to intervene to smooth trading. Overall the AUD/USD traded with a low of 0.8071 and a high of 0.8473 before closing the US session at 0.8190.
Oil & Gold (XAU) was sold once again as USD strength overcame safe haven demand. A stronger Euro also hampered the demand. Overall trading with a low of USD$1174 and high of USD$1198 before ending the New York session at USD$1183 an ounce. Oil Slumped once again with US investor confidence. WTI Oil Closed -$1.86 at $69.80 a barrel.
Euro - 1.2580
Initial support at 1.2102 (April 2006 low) followed by 1.2000 (Round Number Support). Initial resistance is now located at 1.2597 (May 14 high) followed by 1.2747 (May 12 high)
Yen - 90.10
Initial support is located at 88.97 (May 20 low) followed by 87.95 (May 6 low). Initial resistance is now at 91.88 (May 20 low) followed by 92.97 (May 18 high).
Pound - 1.4390
Initial support at 1.4111 (March 30 2009 low) followed by 1.3845 (March 18 2009 low). Initial resistance is now at 1.4517 (May 18 High) followed by 1.4918 (May 13 low).
Australian Dollar - 0.8225
Initial support at 0.8000 (Big Figure) followed by the 0.7828 ( 2009 low). Initial resistance is now at 0. 8499 (May 18 low) followed by 0.8725 (May 19 high).
Gold - 1171
Initial support at 1157 (May 5 low) followed by 1146 (April 27 low). Initial resistance is now at 1229 (Key level) followed by 1250 (1123.90 plus 1.618 of 1085.3-1170.1).
Oil - 69.80
Initial support at 69.50 (Intraday Support) followed by 68.00 (Intraday Support). Initial resistance is now at 70.00 (March high) followed by 72.50 (Intraday Resistance).