Last week's currency trading review

The Dollar was under heavy selling pressure after the EU summit was able to stabilize the Greece Debt crisis and lessen the chance of contagion. This combined on Friday and over the weekend with a break down in the US debt Ceiling negotiations and left the US with its own burgeoning Debt crisis. June Housing Starts showed a strong 0.63mn vs. 0.58mn previously but Existing Home Sales at 4.77mn vs. 4.92mn forecast. The Euro was under pressure at the start of the week but reacted positively to the second Greece bailout and broke above 1.4400 on Friday. The German Sentiment surveys showed some weakness with the debt crisis impacting outlook. July German ZEW dropped to -15.1 vs. -11.8 previously and July IFO falling to 112.9 vs. 113.7 previously. The EUR/USD is up +1.43% currently at 1.4356, after opening the week at 1.4150.

The Japanese Yen did well against the Dollar as the safe haven of choice but lost ground against risk assets in the AUD and the EUR. Intervention is more likely as the major falls lower with Y79 and & Y78 already bringing lots of comments from Japanese Government officials. The USD/JPY is down -0.73% currently at 78.52, after opening at 79.09. The GBP broke to the topside tracking the stock markets and the Euro higher. The EUR/GBP did rebound however as the Euro outperformed and the key cross in now pivoting the 0.8800 level. June Retail Sales showed some strength at 0.7% m/m vs. 0.5% previously. The GBP/USD is up +1.06% currently at 1.6297 after opening at 1.6125. The AUD did well with gold and stocks pushing higher. Resistance at 1.0800 was broken and the market is well poised for further gains as the outlook for the Australian economy is still very positive. Wednesday's CPI data is critical for this quarters RBA rate hike chances with a high number forcing the central bank to raise rates to slow inflation. The AUD/USD is down +1.86% currently at 1.0846 after opening at 1.0644.

The Forex Trading Economic Data Ahead Preview

In the States; On Tuesday, New Homes Sales forecast at 421k vs. 319k previously. ON Thursday, Weekly Jobless Claims forecast at 412k vs. 418k previously. On Friday, Adv Q2 GDP forecast at 1.6% vs. 1.9% previously. Also released, July Chicago PMI forecast at 60.2 vs. 61.1 previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Wednesday, German CPI forecast at 0.3% vs. 0.1% previously. On Friday, June German Retail Sales forecast at 1.6% vs. -2.8% m/m. Also released, EU June CPI forecast at 2.7% y/y. In the UK, On Tuesday, Q2 GDP forecast at 0.2% v s. 0.5%. On Friday, July Nationwide HPI forecast at -0.1% vs. 0.0%m/m. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Friday. Preliminary Industrial Production forecast at 4.6% vs. 6.2% previously m/m. In Australia; On Wednesday, Q2 CPI forecast at 0.7% vs. 1.6% previously Q/Q. On Friday, Private sector credit are forecast 0.4% vs. 0.3% previously m/m. 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

1.4069

1.4134

1.4395

1.4467

1.4554

USD/JPY

76.25

78.00

78.45

79.70

80.83

GBP/USD

1.6069

1.6121

1.6310

1.6366

1.6442

AUD/USD

1.0598

1.0694

1.0825

1.0889

1.0953

XAU/USD

1564.00

1572

1610

1613

1628

OIL/USD

98.00



99.00

99.10

100.00

100.50



Euro - 1.4395

Initial support at 1.4134 (Jul 20 low) followed by 1.4069 (Jul 19 low). Initial resistance is now located at 1.4467 (Jul 6 high) followed by 1.4554 (Jul 5 high)



Yen - 78.45

Initial support is located at 78.00 (Big Figure support) followed by 76.25 (Mar 17 low). Initial resistance is now at 79.70 (Jun 8 high) followed by 80.83 (Jul 11 high).

Pound - 1.6310

Initial support at 1.6121 (Jul 21 low) followed by 1.6069 (Jul 20 low). Initial resistance is now at 1.6366 (76.4% retrace of 1.6547-1.5781) followed by 1.6442 (Jun 14 high).



Australian Dollar - 1.0825

Initial support at 1.0694 (Jul 21 low) followed by the 1.0598 (Jun 19 low). Initial resistance is now at 1.0889 (May 11 high) followed by 1.0953 (May 3 high).

Gold - 1610

Initial support at 1572 (Jul 14 low) followed by 1564 (Jul 13 low). Initial resistance is now at 1613 (Channel upper drawn from Jul 1 low on 60 min chart) followed by 1628 (1462.45 plus 0.618 of 1577.57-1308.25).



Oil - 99.10

Initial support at 99.00 (Intraday Support) followed by 98.00 (Intraday Support). Initial resistance is now at 100.00 (Intraday resistance) followed by 100.50 (Intraday Resistance).





Written by Anthony Darvall