Last week's currency trading review

The Dollar the main story in the markets continued to be the European debt situation with particular focus on Greece. The ongoing bouts of risk aversion pertain to fears that Greece will default if they don't receive the next tranche of IMF/EU bailout money. The US Fed did meet and signaled the end of QE2 as scheduled and Bernanke downgraded the GDP outlooks for 2011 and 2012.  The Euro was the eye of the storm very volatile with daily swings of 200-300 pips given conflicting comments from important players in the debt saga. Concerns that even a voluntary Debt rollover would trigger a Default was tempered by more positivity that the Greece Austerity budget would get past after the PM survived a no confidence vote. German IFO improved to 114.5 vs. 113.6 in some rare good news on the sentiment front.  The EUR/USD is down -0.83% currently at 1.4187, after opening the week at 1.4305.

The Japanese Yen was strong as the safe haven status helped support. USD/JPY found support at Y80 and range trading above the figure. EUR/JPY is following the major but other crosses such as the AUD/JPY and GBP/JPY are under heavy selling pressure after support level broke during the weak. The USD/JPY is down +0.45% currently at 80.39, after opening at 80.03. The GBP was the weakest currency in the market after the Bank of England meeting minutes were much more bearish that the market was expecting. Cable broke below 1.6000 and EUR/GBP is testing to break higher after finishing near multi month highs above 0.8900. The BOE minutes showed more members looking to expand the Asset purchase program than last meeting. The GBP/USD is down -1.47% currently at 1.5956 after opening at 1.6191. The AUD broke below the key 1.0500 support seen over the past few months and could move lower as commodities crash led by Oil. Commodities are crashing on concerns China growth may slow and the EU debt crisis could derail the Global recovery. The AUD/USD is down -1.23% currently at 1.0487 after opening at 1.0616.

The Forex Trading Economic Data Ahead Preview

In the States; On Tuesday, S&P Case Shiller forecast at -3.9% vs. -3.6% previously. On Wednesday, May Pending Home Sales forecast at 1.3% vs. -11.6% previously m/m. On Thursday, Weekly Jobless Claims are forecast at 424k vs. 429k previously. On Friday, June ISM Manufacturing forecast at 51.9 vs. 53.5 previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Wednesday, ECB President Trichet Speaks and Greece Austerity Vote Expected. On Thursday, Trichet Speaks again and German May Unemployment forecast at -17k vs. -8k previously. Also released, June CPI forecast at 2.8% vs. 2.7% previously y/y. On Friday, May Unemployment is forecast unchanged at 9.9%. In the UK, On Tuesday, Inflation Hearing. On Thursday, June Nationwide HPI forecast at 0.1% vs. 0.3% m/m. On Friday, June Manufacturing PMI forecast at 52.3 vs. 52.1 previously. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Wednesday, May Industrial Production is forecast at 5.6% vs. 1.6% previously. On Friday, Q2 Tankan Manufacturing Survey forecast at -7 vs. 6 previously. In Australia; On Thursday, Private Sector Credit forecast at 0.4% vs. 0.0% previously.

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

1.4002

1.4074

1.4300

1.4358

1.4459

USD/JPY

80.00

80.14

80.80

81.06

81.33

GBP/USD

1.5822

1.5881

1.5975

1.6075

1.6200

AUD/USD

1.0289

1.0390

1.0465

1.0502

1.0601

XAU/USD

1504.00

1485

1500

1526

1549

OIL/USD

89.00



90.00

90.60

92.50

95.00





Euro - 1.4300

Initial support at 1.4074 (Jun 16 low) followed by 1.4002 (May 24 low). Initial resistance is now located at 1.4358 (Jun 23 high) followed by 1.4459 (61.8% retrace of 1.4697-1.4074)



Yen - 80.80

Initial support is located at 80.14 (Jun 24 low) followed by 80.00 (Key Support). Initial resistance is now at 81.06 (Jun 16 high) followed by 81.33 (Jun 2 high).

Pound - 1.5975

Initial support at 1.5881 (61.8% retrace of 1.5345-1.6747) followed by 1.5822 (Jan 31 low). Initial resistance is now at 1.6075 (Jun 23 high) followed by 1.6200 (Psych Resistance).



Australian Dollar - 1.0465

Initial support at 1.0390 (Apr 12 low) followed by the 1.0289 (Apr 5 low). Initial resistance is now at 1.0502 (Jun 27 high) followed by 1.0601 (Jun 24 high).

Gold - 1500

Initial support at 1485 (76.4% retrace of 1462.45-1558.25) followed by 1471 (May 17 low). Initial resistance is now at 1526 (June 24 high) followed by 1523 (Jun 23 high).



Oil - 90.60

Initial support at 90.00 (Intraday Support) followed by 89.00 (Intraday Support). Initial resistance is now at 92.50 (Intraday resistance) followed by 95.00 (Intraday Resistance).





Written by Anthony Darvall