Last week's currency trading review

The Dollar enjoyed some support across the board with traders happy to sell into rallies and bad news continuing to flow through steadily. The main story continued to be the deepening European debt crisis with Greece again in the headlines. Weekly Jobless Claims improved to 409k vs. 438k previously. May Philly FED slumped however to 3.9 vs. 18.5 previously. The Euro the ratings downgrade of Greece to Junk sent the Euro plummeting on Friday after steady gains during the week back above 1.4300. EUR/CHF hit all time lows near 1.24 and EUR/GBP fell back to 0.8700. EU CPI remained high at 2.8% in April. The EUR/USD is up +0.28% currently at 1.4156, after opening the week at 1.4117.

The Japanese Yen the Yen was strong against the Euro and risk currencies but the Dollar was the safe haven of choice with the market pressing Y81 on the end of the US QE2 program. Adding to Yen selling pressure is the downside impact of the Earthquake on growth with the Q1 GDP falling -0.9% vs. -0.5% forecast. The USD/JPY is up +1.10 % currently at 81.68, after opening at 80.78. The GBP data remained very mixed in the UK last week with Jobs data weak at +12.4k claimants vs. 0.4k forecast. This was countered from above expectation inflation at 4.5% vs. 4.2% previously. Also strong April retail sales at 1.1% vs. 0.3% previously m/m. The GBP/USD is up +0.23% currently at 1.6232 after opening at 1.6195. The AUD spent most of the week recovering and was able to end higher with the market focus more on selling the Euro. Stock market weakness is pressuring the Aussie which is positively correlated with the direction of global equities. AUD/JPY found support at Y85 and rebounded to Y87. The AUD/USD is up +.087 % currently at 1.0663 after opening at 1.0570.

The Forex Trading Economic Data Ahead Preview

In the States; On Tuesday, April New Home Sales forecast at 1.7% vs. 11.1% previously. On Wednesday, April Durable Good Orders forecast at -2% vs. 4.1%. On Thursday, Q1 GDP forecast at 2.2% vs. 1.8% previously. Weekly Jobless Claims previously at 409k. On Friday, UoM Consumer  Confidence forecast at 72.4. Also released, April Pending home Sales forecast at -1% vs. 5.1% previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday, German IFO forecast at 113.7 vs. 114.2 previously. On Wednesday, German GFK confidence forecast at 5.6 vs. 5.7 previously. On Thursday, ECB President Trichet Speaks. On Friday, German May CPI forecast at 0.0% vs. 0.2%. In the UK, On Wednesday, Q1 GDP forecast at 0.5% vs. 05% previously. On Thursday, May GFK Consumer Confidence forecast at -31 vs. -31 previously. On Friday, May Nationwide forecast at 0.1% vs. -0.2% previously. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Thursday, April Retail Sales forecast at 2.6% vs. -7.6% previously. In Australia; No data this week.

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

1.4021

1.4062

1.4135

1.4442

1.4500

USD/JPY

78.83

80.00

80.95

81.69

82.28

GBP/USD

1.6091

1.6166

1.6185

1.6380

1.6517

AUD/USD

1.0443

1.0518

1.0550

1.0700

1.0953

XAU/USD

1462.00

1471

1491

1526

1551

OIL/USD

92.50



95.00

96.90

98.00

100.00





Euro - 1.4135

Initial support at 1.4062 (Apr 11 low) followed by 1.4021 (Mar 28 low). Initial resistance is now located at 1.4442 (May 9 high) followed by 1.4500 (Key level)



Yen - 80.95

Initial support is located at 80.00 (Psych suppport) followed by 78.83 (Mar 18 low). Initial resistance is now at 81.69 (May 2 low) followed by 82.28 (Apr 28 High).

Pound - 1.6185

Initial support at 1.6166 (Apr 18 low ) followed by 1.6091 (Apr 5 low). Initial resistance is now at 1.6380 (May 12 high) followed by 1.6517 (May 11 high).



Australian Dollar - 1.0550

Initial support at 1.0518 (38.2% retrace of 0.9706-1.1012) followed by the 1.0443 (Apr 19 low). Initial resistance is now at 1.0700 (big figure resistance) followed by 1.0953 (May 3 high).

Gold - 1491

Initial support at 1471 (May 6 low) followed by 1462 (May 5 low). Initial resistance is now at 1526 (May 11 high) followed by 1551 (May 3 high).



Oil - 96.90

Initial support at 95.00 (Intraday Support) followed by 92.50 (Intraday Support). Initial resistance is now at 98.00 (Intraday resistance) followed by 100.00 (Intraday Resistance).





Written by Anthony Darvall