Last week's currency trading review

The Dollar data releases were mostly negative throughout the week and the investor sentiment gradually deteriorated. Usually the USD would perform well in such an environment but the US data was the main source of weakness and the positive Greece bailout news allowed the biggest pair in the EUR/USD to rally over 2%. May NonFarm Unemployment was +54k vs. +161k forecast. The Euro was the strongest currency in the market on the back of a positive outcome to a fresh Greece debt crisis. The German stance shift to no restructuring allowed the Euro to rally on Thursday and Friday even as stock markets fell globally.  The EUR/USD is up +2.15% currently at 1.4630, after opening the week at 1.4315.

The Japanese Yen gained against the USD down to the key Y80 level. Some traders see this level as a line in the sand where Japanese official will again talk about the strength of the Yen and the chance of intervention grows below. EUR/JPY bounced higher but was the exception in risk off trading. The USD/JPY is down -0.69% currently at 80.25, after opening at 80.80. The GBP PMI surveys reinforced the weakness most economists see in the UK recovery with May Manufacturing PMI falling to 52.1 vs. 54.4 previously and Services fall to 53.8 vs. 54.3 previously. The EUR/GBP is a major cross and broke technical level to grind higher above 0.8900. The GBP/USD is down -0.52% currently at 1.6423 after opening at 1.6508. The AUD the commodity and risk and currency was under pressure but finished flat with a rally on Friday helping to erase losses. Q1 GDP fell more than expected at -1.2% q/q vs. -1.0% forecast. Strong however was the April Retail sales figures which rebounded +1.1% vs. -0.3% previously m/m. The AUD/USD is up +.007 % currently at 1.0713 after opening at 1.0705.

The Forex Trading Economic Data Ahead Preview

In the States; On Tuesday, Fed Chief Ben Bernanke Speaks. On Thursday, Weekly Jobless Claims are forecast at 424k vs. 422k previously. Also released, April Trade Balance forecast at -48.6bn vs. -48.6bn previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday, April retail Sales forecast at 0.3% m/m. On Thursday, ECB Rate announcement forecast at 1.25%. On Friday, May CPI forecast to remain unrevised at 2.3% y/y. In the UK, on Thursday, April Trade Balance forecast at -7.5bn vs. -7.6bn previously. Also, BOE Rate decision forecast to remain at 0.5%. On Friday, April Industrial Production forecast at 1.4% vs. 0.7% previously. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Friday, Q1 GDP final forecast at -0.8% vs. -0.9% previously. In Australia; On Tuesday, RBA Rate announcement forecast to hold at 4.75%. On Thursday, May Unemployment forecast at 25k vs. -22k previously. The unemployment rate is forecast to remain at 4.9%.

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

1.4125

1.4305

1.4635

1.4711

1.4800

USD/JPY

79.57

80.00

80.30

81.33

81.77

GBP/USD

1.6132

1.6268

1.6440

1.6496

1.6661

AUD/USD

1.0510

1.0609

1.0740

1.0758

1.0877

XAU/USD

1504.00

1518

1545

1550

1577

OIL/USD

98.00



100.00

100.60

103.00

105.00





Euro - 1.4635

Initial support at 1.4305 (Jun 2 low) followed by 1.4257 (May 30 low). Initial resistance is now located at 1.4711 (76.4% retrace of 1.4940-1.3970) followed by 1.4800 (big figure resistance)



Yen - 80.30

Initial support is located at 80.00 (Big figure support) followed by 79.57 (May 5 low). Initial resistance is now at 81.33 (Jun 2 high) followed by 81.77 (May 19 high).

Pound - 1.6440

Initial support at 1.6268 (May 26 low) followed by 1.6132 (May 25 low). Initial resistance is now at 1.6496 (Jun 1 high) followed by 1.6547 (May 31 high).



Australian Dollar - 1.0740

Initial support at 1.0609 (May 27 low) followed by the 1.0510 (May 26 low). Initial resistance is now at 1.0758 (May 31 high) followed by 1.0877 (76.4% retrace of 1.1012-1.0441).

Gold - 1545

Initial support at 1518 (May 27 low) followed by 1504 (May 23 low). Initial resistance is now at 1550 (June 1 high) followed by 1577 (All time high).



Oil - 100.60

Initial support at 100.00 (Intraday Support) followed by 98.00 (Intraday Support). Initial resistance is now at 103.00 (Intraday resistance) followed by 105.00 (Intraday Resistance).





Written by Anthony Darvall