Bernanke Bounce on Friday

Last week's currency trading review

The Dollar finished the week of a weak footing after Bernanke's speech at the Jackson Hole Symposium helps risk asset's rally on Friday. Earlier in the week safe haven flows had supported the Dollar and most pairs tested month lows led by the Euro. Existing Home Sales slumped 27% to 3.83m in July. The Euro managed small gains on better than forecast German IFO in August and Dollar Selling on Friday. EUR/JPY was also a big mover as the USD/JPY reacts to BOJ intervention talk. The EUR/USD gained +0.39% closing at 1.2761, after opening the week at 1.2711.

The Japanese Yen was volatile against most pairs with the USD/JPY surging on Friday after reports of a special BOJ meeting surfaced and the PM got ready to meet with the BOJ Governor Shirakawa. Deflation continued with August CPI at -1.1% y/y.  The USD/JPY fell -0.48% closing at 85.20 vs. 85.60 previously. The GBP some good economic data was unable to help the pound rally with sentiment towards pair still weak and investor sentiment mixed. Q2 GDP was revised higher to 1.2% vs. 1.1% initial reading.  The GBP/USD fell -0.03% closing at 1.5526 after opening at 1.5531. The AUD traded under 0.8800 mid week before staging a stunning rally on Friday with AUD/JPY surging over 200 pips and AUD/USD testing 0.9000. Q2 CAPEX missed forecasts at -4.0% vs. 2.3% previously. The AUD/USD gained +0.57% closing at 0.8988 after opening at 0.8937.

The Forex Trading Week Preview

In the States; On Tuesday, June CS Home Prices forecast at 3.6% vs. 4.6% y/y previously. Also released, August Chicago PMI is forecast at 50.9 vs. 50.0 previously along with August FOMC minutes. On Wednesday, August ADP Employment Change is forecast at 17k vs. 42k previously. Also released, August ISM Manufacturing is forecast at 52.8 vs. 55.5 previously. On Thursday, Weekly Jobless Claims are forecast at 475k vs. 473k previously. On Friday, August Non Farm Payrolls are forecast at -100k vs. -131k previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday, August CPI is forecast at 1.6% vs. 1.7% y/y previously. On Thursday, ECB rate announcement and press conference forecast to hold at 1.0%. On Friday, July Retail Sales are forecast at 0.2% vs. 0.3% m/m previously. In the UK, on Wednesday, August PMI Manufacturing is forecast 57 vs. 57.3 previously. On Thursday, August Nationwide House prices is forecast at -0.3% vs. -0.5% m/m previously. On Friday, August PMI Services previously at 53.2 previously.  We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Tuesday, July Retail Trade forecast at 0.5% vs. 0.4% previously. In Australia; On Wednesday, Q2 GDP is forecast at 0.9% vs. 0.5% Q/Q. On Thursday, July Trade Balance forecast at 3.1bn vs. 3.539bn 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

1.2152

1.2434

1.2750

1.2933

1.3000

USD/JPY

81.85

83.60

85.80

86.38

88.12

GBP/USD

1.5125

1.5324

1.5545

1.5713

1.5999

AUD/USD

0.8634

0.8771

0.9015

0.9080

0.9222

XAU/USD

1190.00

1210

1234

1247

1265.00

OIL/USD

72.50

75.00

75.40

76.00

78.00





Euro - 1.2750

Initial support at 1.2434 (61.8% retrace of 1.1877-1.3334) followed by 1.2152 (June 29 low). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen - 85.80

Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 86.38 (August 13 high) followed by 88.12 (July 28 high).

Pound - 1.5545

Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5713 (Aug 12 high) followed by 1.5999 (Aug 12 high).

Australian Dollar - 0.9015

Initial support at 0.8771 (Aug 25 low) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9080 (August 17 high) followed by 0.9222 (Aug 6 high).

Gold - 1234

Initial support at 1210 (Aug 13 low) followed by 1190 (Aug 10 low). Initial resistance is now at 1247 (June 30 high) followed by 1265 (June 21 high).

Oil - 75.40

Initial support at 75.00 (Intraday Support) followed by 72.50 (Intraday Support). Initial resistance is now at 76.00 (Intraday Resistance) followed by 78.00 (Intraday Resistance).