Last week's currency trading review

The Dollar spent the first half of the week making solid gains on the back of fears Greece would default after rioters protested the Austerity measures needed to receive further aid from the IMF/ECB. US data was mixed witeh May CPI stronger than expected at 0.3% vs. 0.2% and Weekly Jobless Claims dropping top 414k vs. 430k previously. June UoM Consumer Confidence dropped to 71.3 vs. 74.3 previously. The Euro volatility continued with 1.4000 almost tested at the height of fears about the Greece Aid payments being withheld. The mood improved dramatically on news late in the week that Germany had softened its approach to Greek rolling over debt. The market surged back to life testing resistance above 1.4300. The final outcome is still uncertain but sentiment is improving. The EUR/USD fell -0.31% closing at 1.4305, after opening the week at 1.4349.

The Japanese Yen risk aversion and then USD weakness weighed on the USD/JPY which remained close to the key Y80 level for most of the week. The outlook will be closely linked to US data and the speed of normalization of US monetary policy. EUR/JPY slipped below Y115 in a bearish move but was able to finish well off lows. The USD/JPY fell -0.25% closing at 80.03 vs. 80.23 previously. The GBP economic data was weak but EUR/GBP selling supported early in the weak before reversing on Friday. BoE King defended the low interest rates currently in the UK with growth slow and inflation forecasted to fall. May Retail Sales plummeted -1.4% vs. -0.5% previously.  The GBP/USD gained -0.23% closing at 1.6191 after opening at 1.6228. The AUD was hit early in the week on China fears and Greece risk aversion but was able to bounce sharply on Friday to finished well supported above 1.0600 with a base seen made under 1.0500. RBA Governor Stevens held buyers with a speech on Wednesday letting traders know further rate hikes are very possible if inflation doesn't fall. The AUD/USD gained +0.77% closing at 1.0616 after opening at 1.0534.

The Forex Trading Week Preview

In the States; On Wednesday, FOMC Rate Decision forecast to remain at 0.25% but with focus on the Bernanke Speech afterwards. On Thursday, weekly jobless claims are forecast at 414k vs. 414k previously. On Friday, May Durable Good Orders forecast at 1.6% vs. -3.6% previously, Also Q1 Final GDP forecast at 1.9% vs. 1.8% previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday, June German Zew forecast at 88.5 vs. 91.5. On Wedesnday, June Consumer Confidence forecast at -10 vs. -9.8 previously. On Thursday, June Manufacturing PMI forecast at 53.7 vs. 54.6 previously. On Friday, June IFO Business Climate forecast at 113.5 vs. 114.2 previously. In the UK, On Wednesday, June BOE Minutes. On Friday, BOE King Speaks. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; no major data this week. In Australia; On Tuesday, RBA Meeting Minutes released for June. On Friday, RBA Lowe speaks. 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

1.4068

1.4142

1.4355

1.4248

1.4452

USD/JPY

78.83

79.57

80.15

81.01

81.33

GBP/USD

1.6132

1.6173

1.6225

1.6383

1.6496

AUD/USD

1.0440

1.0510

1.0610

1.0726

1.0877

XAU/USD

1504.00

1513

1539

1545

1577

OIL/USD

90.00

 

92.50

94.10

95.00

98.00

 

 

Euro - 1.4355                    

Initial support at 1.4142 (76.4% retrace of 1.3970-1.4697) followed by 1.4068 (May 26 low). Initial resistance is now located at 1.4248 (Jun 15 high) followed by 1.4500 (Psychological Resistance)

 

Yen - 80.15

Initial support is located at 79.57 (May 5 low) followed by 78.83 (Mar 18 low). Initial resistance is now at 81.01 (Jun 3 high) followed by 81.33 (Jun 2 high).

Pound - 1.6225

Initial support at 1.6173 (76.4% retrace of 1.6058-1.6547) followed by 1.6132 (May 25 low). Initial resistance is now at 1.6383 (Jun 15 high) followed by 1.6496 (Jun 1 high).

 

Australian Dollar - 1.0610

Initial support at 1.0510 (May 26 low) followed by the 1.0440 (May 25 low). Initial resistance is now at 1.0726 (Jun 8 high) followed by 1.0877 (76.4% retrace of 1.1012-1.0441).

Gold - 1539

Initial support at 1513 (May 24 low) followed by 1504 (May 23 low). Initial resistance is now at 1545 (June 6 high) followed by 1577 (All time high).

 

Oil - 94.10

Initial support at 92.50 (Intraday Support) followed by 90.00 (Intraday Support). Initial resistance is now at 95.00 (Intraday resistance) followed by 98.00 (Intraday Resistance).

 

 

Written by Anthony Darvall