USD under Pressure

Last week's currency trading review

The Dollar was broadly weak against nearly all currencies for a second week as Gold consolidated gains above $1000 and the Euro and Aussie hit fresh year highs. US stocks markets traded at year highs above 9800 on the Dow Jones. Helping risk sentiment was the large jump in August Retail Sales up 2.7% vs. 2.0% forecast. 

The Eurotraded at 2009 highs of 1.4768 but finished well off these levels on Profit taking into the weekend. EUR/GBP buying help support as the cross broke above the key 0.9000 level. German ZEW forecast at 59.9 came in at 57.7 in September weaker than forecast but still higher than 56.1 previously. The EUR/USD gained 0.93% closing at 1.4707, after opening the week at 1.4570.

The Japanese Yen found strength in comments from the new Finance Minister Fujii stating he was not keen on government intervention in the FX markets and that a strong Yen was not necessarily bad for the Japanese economy. The BOJ met and discussed rates, keeping them at 0.1% but upgrading their economic view. The USD/JPY closed higher +0.93% at 91.35 after opening the week at 90.70. 

The GBP was pummeled lower by comments from BoE Governor King about lowering the interest paid on Bank reserves. Crosses all broke key levels with GBP/JPY under 150 and GBP/AUD under 1.9000. GBP/USD fell -2.40% closing at 1.6267 after opening at 1.6658. 

The AUDcontinued higher with gold sitting above $1000 and risk appetite remaining elevated. 0.8800 proved too much for the pair and it fell back to 0.8700 supports but is remaining well supported on both Interest Rate and Commodity outlooks. The AUD/USD closed up 0.47% at 0.8673 after opening at 0.8632.

The forex trading week preview

In the States; On Monday, August Leading Indicators forecast at 0.6% vs. 0.85 previously. On Tuesday, July House Price Index forecast at 0.5% vs. 0.5% previously. On Wednesday, FOMC Rate Decision forecast unchanged at 0.25% vs. 0.25%. On Thursday, Weekly Jobless 546k vs. 545k previously. On Friday, August Durable Goods forecast at 0.1% vs. 5.1% previously. Also released, UoM Consumer Confidence forecast unrevised at 70.2. The G20 meet on Thursday and Friday, releasing the Communique on Friday Afternoon. 

In the Eurozone; On Wednesday, September PMI Manufacturing forecast at 49.8 vs. 48.2 previously. PMI Services is forecast at 50.4 vs. 49.9 previously. On Thursday, German IFO forecast at 92.0 vs. 90.5 previously. On Friday, EU Money Supply forecast at 2.7% vs. 3.0% previously. 

In the UK; On Wednesday, MPC meeting minutes from this month. On Thursday, MPC Member and BOE chief Economist Dale speaks. 

In Japan; Light data week with BOJ meeting minutes released on Friday from last weeks meeting. In Australia; On Wednesday we have NZD GDP forecast at -0.2% vs. -1.0% previously. On Thursday, RBA Financial Stability Review released. 

TECHNICAL COMMENTARY

CurrencySup 2Sup 1SpotRes 1Res 2
EUR/USD1.44671.45161.47101.47681.4866
USD/JPY89.7190.0091.5091.6492.60
GBP/USD1.61141.62371.62501.65681.6742
AUD/USD0.85290.86250.86750.88140.8943
XAU/USD982.00992.001004.001032.001050.00

Euro - 1.4710

Initial support at 1.4516 (Sept 14 low) followed by 1.4467 (Sept 9 low). Initial resistance is now located at 1.4768 (Sept 17 high) followed by 1.4866 (Sept 22 2008 high)

Yen - 91.50

Initial support is located at 90.00 (Big Figure) followed by 89.71 (February 11 low). Initial resistance is now at 91.64 (Sept 15 high) followed by 92.60 (Sept 9 high).

Pound - 1.6250

Initial support at 1.6237 (Sept 3 low) followed by 1.6114 (Sept 1 low). Initial resistance is now at 1.6742 (Sept 11 high) followed by 1.6831 (Aug 7 high).

Australian Dollar - 0.8675

Initial support at 0.8529 (Sept 8 low) followed by the 0.8383 (61.8% retrace 0..9850-0.6009). Initial resistance is now at 0.8813 (Aug 22 2008 high) followed by 0.8943 (76.4% retrace 0.9850-0.6009).

Gold - 1004

Initial support at 992 (Sept 15 low) followed by 982 (Sept 3 low). Initial resistance is now at 1032 (Mar 17' 2008 high) followed by 1050 (Psychological Figure).