Forex

ISM Manufacturing beats expectation, USD strengthens! 

• The Dollar Traded strong as Chinese manufacturing data sent stocks higher in Asia and Europe and this accelerated in the US session on better than expected August ISM data at 56.3 vs. 55.5 previously. We also released August ADP Employment at -10k vs. +19k forecast. In US stocks the DJIA traded +254 points higher closing at 10254 and the S&P traded +30 points higher closing at 1080. Looking ahead, Weekly Jobless Claims are forecast at 475k vs. 473k previously. Also tonight, Fed Chief Bernanke speaks. USDJPY price action yesterday was between 83.67 – 84.65

  The Euro traded strong as risk appetite pushed the single currency back above 1.2800 and the topside is now in focus after support was found in the last 2 weeks above 1.2500. July German Retail Sales are missed at -0.3% vs. 0.5% previously. EURUSD traded with a low of 1.2662 and a high of 1.2857 before closing at 1.2800. Looking ahead, Q2 GDP is forecast at 1.0% q/q. Also released, ECB rate announcement is forecast at 1.0%. 

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.2690 with a preference to enter into Long positions at 1.2690
• § The USDJPY pivot point is at 84.10 with a preference to enter Long positions at 84.45               

Today’s calendar and market movers:

• § United Kingdom Nationwide House Price for the month of Aug is forecasted to be -0.2%
• § Euro Zone GDP for Q2 is expected at 1%
• § Euro Zone Rate Announcement for September is expected to remain unchanged at 1%
• § United States Jobless claims for the week is expected at 475K
• § United States Pending Home Sales for July is expected to drop by -1% 

Equity Markets: 

• US equities closed positive yesterday with the S&P500 at 2.95% and the DJIA at 2.54%. The European bourses were positive with the FTSE up 2.56% the DAX and the CAC closing at 2.52% and 3.65% respectively. The NIKKEI and the HSI at the time of writing is 1.54% and 1.27% respectively.

CURRENCY TRADING SUMMARY – 2nd September (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) strong Chinese manufacturing data sent stocks higher in Asia and Europe and this accelerated in the US session on better than expected August ISM data at 56.3 vs. 55.5 previously. Also released August ADP Employment at -10k vs. +19k forecast. In US stocks, DJIA +254 points closing at 10254, S&P +30 points closing at 1080 and NASDAQ 62 points closing at 2176. Looking ahead, Weekly Jobless Claims are forecast at 475k vs. 473k previously. Also tonight, Fed Chief Bernanke speaks.

The Euro (EUR) risk appetite pushed the single currency back above 1.2800 and the topside is now in focus after support was found in the last 2 weeks above 1.2500. July German Retail Sales are missed at -0.3% vs. 0.5% previously. EUR/USD traded with a low of 1.2662 and a high of 1.2857 before closing at 1.2800. Looking ahead, Q2 GDP is forecast at 1.0% q/q. Also released, ECB rate announcement is forecast at 1.0%.

The Japanese Yen (JPY) buoyant crosses helped the major lift to the mid Y84 region after first testing  decade lows at Y83.70. AUD/JPY was the standout performer up nearly 2 Yen. The downtrend remains in place and Friday’s Nonfarm will be critical for future direction. Overall the USDJPY traded with a low of 83.66 and a high of 84.69 before closing the day around 84.50 in the New York session.

The Sterling (GBP) was contained until NY opened when the underperforming Pound surged back to test 1.5500. GBP/JPY struggled above Y130 is a big reason for Pound weakness in recent sessions. Overall the GBP/USD traded with a low of 1.5334 and a high of 1.5495 before closing the day at 1.5445 in the New York session. Looking ahead, August HPI is forecast at -0.2% vs. -0.5%.

The Australian Dollar (AUD) the Aussie was the best performer of the day as the Q2 GDP beat expectations with a rise of 1.2% q/q. Adding fuel to the rally was strong Chinese PMI figures and a major move higher in US stocks. Resistance at 0.9000 was broken forcefully and sentiment has turned very bullish. Overall the AUD/USD traded with a low of 0.8914 and a high of 0.9119 before closing the US session at 0.9090. Update July Trade Balance at 1.8bn vs. 3.1bn previously.

Oil & Gold (XAU) new month highs above $1250 prompted profit taking back to lower $1240 regions. Overall trading with a low of USD$1242 and high of USD $1255 before ending the New York session at USD$1246 an ounce. Jumped with improving sentiment back towards $75.00. WTI Oil Closed +$1.99 at $73.91 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2785

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen – 84.10

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 87.15 (38.2% retrace of 92.89-83.60).

Pound – 1.5435

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 1.5475 (Aug 31 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.9050

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 – 1245

Initial support at 1232 (Aug 31 low) followed by 1210 (Aug 24 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (round number).

Oil – 73.50

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

CURRENCY TRADING SUMMARY – 1st September (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) very weak Asian stocks helped the USD to intraday highs against most pairs except the other safe havens in the JPY and CHF. US sentiment improved though and stocks were able to finish higher as June House Price Index showed a 4.2%y/y and CB Consumer Confidence increased to 53.5 in August. In US stocks, DJIA +4 points closing at 10014, S&P +1 points closing at 1049 and NASDAQ -5 points closing at 2114. Looking ahead, August ISM Manufacturing is forecast at 53 vs. 55.5 previously and ADP Employment is forecast at 19k vs. 42k previously.

The Euro (EUR) lows of the day were seen into the European session before a solid rally in EUR/JPY helped lift and then strong US data inspired risk on trades. German Unemployment at -17k in August was roughly as forecast. EUR/USD traded with a low of 1.2624 and a high of 1.2744 before closing at 1.2675. Looking ahead, July German Retail Sales forecast at 0.5% vs. -0.9% m/m previously.

The Japanese Yen (JPY) risk aversion flows pushed the market lower and bounces were limited with the weaker USD and the major tested Y84. GBP/JPY was the weakest cross after breaking through Y130 Overall the USDJPY traded with a low of 83.81 and a high of 85.69 before closing the day around 84.40 in the New York session.

The Sterling (GBP) was under pressure for most of the day falling to month lows under 1.5400. EUR/GBP buying and GBP/JPY selling added weight as move end flows impacted the Pound negatively. UK July Lending was weak at 258mn. Overall the GBP/USD traded with a low of 1.5325 and a high of 1.5476 before closing the day at 1.5370 in the New York session.

The Australian Dollar (AUD) stabilized in Europe before rallying on good US home data and Stocks towards back above 0.8940. July Retail Sales surged 0.7% vs. 0.4% previously. Overall the AUD/USD traded with a low of 0.8859 and a high of 0.8959 before closing the US session at 0.8950. Update Q2 GDP surges 1.2% vs. 0.9% forecast Q/Q.

Oil & Gold (XAU) broke above $1240 on its way to test $1250. Overall trading with a low of USD$1231 and high of USD $1250 before ending the New York session at USD$1246 an ounce. Oil remained under pressure falling -$2.78. WTI Oil Closed -$2.78 at $71.92 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2690

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen – 84.45

Initial support is located at 84.28 (August 27 low) followed by 83.60 (May 1995 low). Initial resistance is now at 86.38 (August 13 high) followed by 87.15 (38.2% retrace of 92.89-83.60).

Pound – 1.5365

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 1.5475 (Aug 31 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.8990

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 – 1247

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 – 72.30

Initial support at 71.00 (Intraday Support) followed by 70.00 (Intraday Support). Initial resistance is now at 72.50 (Intraday Resistance) followed by 75.00 (Intraday Resistance).

CURRENCY TRADING SUMMARY – 31st August (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) started the day on a weak footing on expectations that an emergency BOJ meeting will support global stock markets further. When the BOJ failed to meet market expectations the sentiment turned sour and the USD gained across the board on safe haven flows. US Personal Income gained 0.2% in July and spending rose 0.4%. In US stocks, DJIA -140 points closing at 10010, S&P -15 points closing at 1048 and NASDAQ -33 points closing at 2119. Looking ahead, June Case Shiller House Prices forecast at 0.2% vs. 0.5% previously. Also released, FOMC minutes.

The Euro (EUR) the Euro relief rally stalled in Asia and was dragged lower once again from heavy EUR/JPY sales post BOJ. August Economic sentiment increased to 101.8 vs. 101.1 previously. The selling continued in US and the Euro finished at day lows. EUR/USD traded with a low of 1.2658 and a high of 1.2757 before closing at 1.2665. Looking ahead, August German Unemployment is forecast at -20k and the rate to remain at 7.6%.

The Japanese Yen (JPY) USD/JPY hit day highs at 85.90 on BOJ optimism but then heavy selling emerged as the special meeting failed to directly address FX. Further losses were seen throughout the day on weak US stocks. Overall the USDJPY traded with a low of 84.47 and a high of 85.93 before closing the day around 84.50 in the New York session. UPDATE July Retail Sales forecast at 3.9% vs. 3.2% previously.

The Sterling (GBP) tracked general market movements topping in Asia before giving up all its gains and then turned negative in New York. Month end flows are expected to be slightly negative for the pound and may way on Tuesday with London closed on Monday. Overall the GBP/USD traded with a low of 1.5454 and a high of 1.5580 before closing the day at 1.5465 in the New York session. Update August Consumer Confidence improves to -18 vs. -22 previously.

The Australian Dollar (AUD) risk off selling in the US and heavy AUD/JPY sales after the BOJ helped push the Aussie back to lower 0.8900 and threatens to return the pair to the recent downtrend. Overall the AUD/USD traded with a low of 0.8912 and a high of 0.9029 before closing the US session at 0.8925. Update July Retail Sales forecast at 0.7% vs. 0.4% previously.

Oil & Gold (XAU) was very contained in a $5 range above $1230 an ounce. Overall trading with a low of USD$1233 and high of USD $1238 before ending the New York session at USD$1237 an ounce. Oil fell sharply after investor sentiment soured in the US session. WTI Oil Closed -$1.00 at $74.20 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2635

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen – 84.55

Initial support is located at 84.28 (August 27 low) followed by 83.60 (May 1995 low). Initial resistance is now at 86.38 (August 13 high) followed by 87.15 (38.2% retrace of 92.89-83.60).

Pound – 1.5455

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 06 high).

Australian Dollar – 0.8915

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 – 1236

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 – 74.20

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

CURRENCY TRADING SUMMARY – 30th August (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) risk was put back in the market after better than expected US GDP and strong words of support from Fed Chief Bernanke at the Jackson Hole. Q2 GDP was revised lower to 1.6% vs. 2.4% initially released but was better than the 1.4% q/q expected. Fed Chief Bernanke reopened the door on additional monetary easing if the US economy was to further deteriorate. In US stocks, DJIA +164 points closing at 10150, S&P +17 points closing at 1064 and NASDAQ +34 points closing at 2153. Looking ahead, July Personal Spending is forecast at 0.4% vs. 0.0% previously.

The Euro (EUR) was well supported on USD weakness and comments from the ECB’s Weber that Europe was on the verge of a self-sustaining recovery. Bigger moves where seen through the EUR/JPY which rallied near 2 Yen. August German CPI fell 1.0% vs. 1.2% previously y/y. EUR/USD traded with a low of 1.2677 and a high of 1.2778 before closing at 1.2738. Looking ahead, August Sentiment forecast at 101.7 vs. 101.3.

The Japanese Yen (JPY) USD/JPY started moving higher in Asia on talk that the PM Kan would be holding a special press conference on the Yen strength. July Unemployment Rate is forecast at 5.2% vs. 5.3% previously. Overall the USDJPY traded with a low of 84.28 and a high of 85.49 before closing the day around 85.33 in the New York session. UPDATE SPECIAL BOJ MEETING TODAY.

The Sterling (GBP) Q2 GDP was upgraded to 1.2% vs. 1.1% initially released. GBP/USD was sold however at the start of the US session on reported comments from a UK opposition politician UK economy was about to be ‘hit from a hurricane’. Overall the GBP/USD traded with a low of 1.5445 and a high of 1.5539 before closing the day at 1.5517 in the New York session.

The Australian Dollar (AUD) surged on US stocks and AUD/JPY buying pushing the Aussie back to 0.9000 and Y77. Sharp rallies in Oil and a feeling the bottom was in place from recent selling supported the move higher. Overall the AUD/USD traded with a low of 0.8846 and a high of 0.8998 before closing the US session at 0.8892.

Oil & Gold (XAU) was contained as USD weakness was met by reduced demand for the safe haven metal. Overall trading with a low of USD$1232 and high of USD $1242 before ending the New York session at USD$1238 an ounce. Oil surged back to the $75 a barrel level as shorts covered. WTI Oil Closed +$2.30 at $75.20 a barrel.

TECHNICAL COMMENTARY

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).

Buy the dollar or sell the dollar? 

• The Dollar was volatile yesterday with USD strength on the back of risk aversion in Europe which later reversed as US housing data weakened further. July Existing Home Sales fell 27% as the effect of the removal of the housing credit continues to be felt. On a more positive note however we saw the Richmond Fed Manufacturing survey come in better than expected. USDJPY price action was impressive yesterday as the JPY made new 15 year highs as global risk aversion sparked a flight to safety. The USDJPY traded between 85.72 – 83.57. Looking ahead, July Durable Goods and July New Home Sales. These 2 pieces of data will be closely watched as traders look for more clues on a pending US slowdown. Ben Bernanke’s speech on Friday will also be a market mover as the Fed Chairman will try and explain why the Fed decided to reinvest the maturing debt and maintain its large balance sheet.

  The Euro tested 1.2600 as EUR/JPY followed USD/JPY to fresh decade lows and stock markets around the globe fell. Some weak US data allowed a bounce to 1.2700 but a S&P downgrade of long term debt from Ireland sent the Euro lower in late US trade. EUR/USD traded with a low of 1.2586 and a high of 1.2721 before closing at 1.2660. Looking ahead, German IFO Business Climate forecast at 105.7 vs. 106.2 previously. 

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.2720 with a preference to enter into Short positions at 1.2710
• § The USDJPY pivot point is at 84.60 with a preference to enter Short positions at 84.55               

Today’s calendar and market movers:

• § Germany IFO Business Climate for Aug expected at 105.7
• § United States Durable Goods Orders for July expected at 2.8
• § United States New Home Sales for July expected at 0.33 mio 

Equity Markets: 

• US equities closed negative yesterday with the S&P500 at -1.45% and the DJIA at -1.32%. The European bourses were negative with the FTSE down -1.51% the DAX and the CAC closing at -1.26% and -1.75% respectively. The NIKKEI and the HSI at the time of writing is -1.93% and -0.43% respectively.

Durable goods disappoint, QE2 on the way? 

• The U.S. Dollar traded weaker yesterday as US data missed expectations once again. Stock markets fell but support was found and a sharp rally was seen in the US close. July New Home Sales dropped -12.4% to 0.276m vs. 0.33m forecast and durable goods orders disappointed again with a much lower than expected print. Investors are now expecting QE2 from the Fed given the series of unfortunate events. Bernanke will be on the spotlight on Friday in his upcoming speech for any clues on future policy direction. The DJIA closed+19 points at 10060 and the S&P closed +3 points higher at 1054. Looking ahead, Weekly Jobless Claims are forecast at 490k vs. 500k previously.

  The Euro was supported via solid German IFO Business climate at 106.7 vs. 106.2 previously and dips were bought to keep EUR/USD supported on the day. The Euro was jittery yesterday before and during a Portuguese bond auction as the sentiment was for a bad auction, however the sale went without incident and the Euro gathered its strength and traded to 1.2728 from 1.2607 lows. Looking ahead, September Consumer Confidence is forecast at 4 vs. 3.9 previously.                                                        

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.2775 with a preference to enter into Short positions at 1.2765
• § The USDJPY pivot point is at 85.10 with a preference to enter Short positions at 85.05               

Today’s calendar and market movers:

• § Germany Consumer Confidence for September expected at 4
• § Switzerland Non Farm Payrolls Q2, previous reading was 3.96 mio
• § United Kingdom CBI distributive trades for August is forecasted at 20
• § United States initial Jobless claims for the week expected at 490K

 Equity Markets: 

• US equities closed positive yesterday with the S&P500 at 0.33% and the DJIA at 0.2%. The European bourses were negative with the FTSE down -0.90% the DAX and the CAC closing at -0.61% and -1.17% respectively. The NIKKEI and the HSI at the time of writing is 0.69% and 0.07% respectively.

CURRENCY TRADING SUMMARY – 27th August (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) was sold on an attempted global rally in Asia but losses where limited and when US stocks sank the Dollar’s misfortune was reversed. Weekly Jobless Claims were at 473k vs. 500k. In US stocks, DJIA -74 points closing at 9985, S&P -8 points closing at 1047 and NASDAQ +17 points closing at 2118. Looking ahead, Q2 GDP is forecast at 1.8%. Fed Chief Bernanke Speaks to Central Bankers.

The Euro (EUR) broke through resistance at 1.2730 in New York on solid weekly jobless claims but failed to hold above the figure. The market will closely watch Bernanke’s speech today for clues on any further US QE and this could dramatically alter the outlook for the EUR/USD. EUR/USD traded with a low of 1.2649 and a high of 1.2766 before closing at 1.2715. Looking ahead, July German Imports forecast at -0.3% vs. -0.9%.

The Japanese Yen (JPY) a rally Asia was capped below Y85 and the rest of the day saw light selling back to lower Y84 region. AUD/JPY and EUR/JPY managed bigger rallies but traders are cautious ahead of Bernankes speech. Overall the USDJPY traded with a low of 84.26 and a high of 84.91 before closing the day around 84.35 in the New York session. UPDATE July unemployment Rate forecast at 5.2% vs. 5.3%.

The Sterling (GBP) broke back above the key 1.5500 level and was able to test 1.5600 on solid EUR/GBP selling and improvement in UK Retail Sale Outlook. August CBI Distributive Trades survey showed a rise to 35 vs. 20 forecast and 33 previously. Overall the GBP/USD traded with a low of 1.5466 and a high of 1.5600 before closing the day at 1.5525 in the New York session. Looking ahead, Q2 GDP forecast at 1.1% q/q.

The Australian Dollar (AUD) pushed above 0.8900 in gentle markets but the late US stock market sell off sent the risk sensitive pair back down to the mid 0.88 region. Q2 Capex missed at -4% vs. 2% forecast and could prompt the RBA to remain on hold at 4.5% for some time further. Overall the AUD/USD traded with a low of 0.8830 and a high of 0.8920 before closing the US session at 0.8860.

Oil & Gold (XAU) consolidated gains well support on dips. Overall trading with a low of USD$1233 and high of USD $1244 before ending the New York session at USD$1236 an ounce. Crude Oil showed two way action finishing well off highs near opening levels. WTI Oil Closed +$0.30 at $72.80 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2715

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 1.2730 (Aug 23 low) followed by 1.2933 (August 6 high)

Yen – 84.45

Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.20 (August 24 high) followed by 86.38 (July 28 high).

Pound – 1.5535

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 – 0.8860

Initial support at 0.8771 (Aug 25 low) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.8915 (August 24 high) followed by 0.9080 (Aug 17 high).

Gold – 1237

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 – 72.90

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

CURRENCY TRADING SUMMARY – 26th August (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) when US data missed expectations once again the stock markets fell but support was found and a sharp rally was seen in the US close. July New Home Sales dropped -12.4% to 0.276m vs. 0.33m forecast. In US stocks, DJIA +19 points closing at 10060, S&P +3 points closing at 1054 and NASDAQ +17 points closing at 2141. Looking ahead, Weekly Jobless Claims are forecast at 490k vs. 500k previously.

The Euro (EUR) was supported via solid German IFO Business climate at 106.7 vs. 106.2 previously and dips were bought to keep EUR/USD roughly unchanged on the day. EUR/JPY tested fresh lows but also about faced on the relief rally. EUR/USD traded with a low of 1.2607 and a high of 1.2728 before closing at 1.2665. Looking ahead, September Consumer Confidence is forecast at 4 vs. 3.9 previously.

The Japanese Yen (JPY) dipped on weak US data but the market is oversold and ready for a relief rally back towards Y85. EUR/JPY and AUD/JPY bounced as well into the US close. The BOJ is steeping up rhetoric but the market is not convinced physical intervention will occur. Overall the USDJPY traded with a low of 84.02 and a high of 84.85 before closing the day around 84.70 in the New York session.

The Sterling (GBP) dips below 1.5400 were bought and the market rallied in the US session on profit taking and solid GBP/JPY buying. The bounce was limited though and the trend is still down for the time being without some catalyst to prompt buyers back above 1.5500. Overall the GBP/USD traded with a low of 1.5387 and a high of 1.5484 before closing the day at 1.5470 in the New York session. August CBI Distributive Trades are forecast at 20 vs. 33 previously.

The Australian Dollar (AUD) hit month lows at the start of the US session but support was strong below the figure and was able to rally back to the mid 0.8850 region. The risk sensitive currency is linked to the stock markets and respective movements. Overall the AUD/USD traded with a low of 0.8794 and a high of 0.8897 before closing the US session at 0.8855. UPDATE Q2 Capex -4% vs. 2% forecast.

Oil & Gold (XAU) traded at fresh months highs to finish above $1240. Overall trading with a low of USD$1229 and high of USD $1241 before ending the New York session at USD$1240 an ounce. Oil bounced with the rest of the market after falling close to the $70 a barrel level. WTI Oil Closed +$0.90 at $72.50 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2685

Initial support at 1.2604 (61.8% retrace of 1.2152-1.3334) followed by 1.2523 (July 13 low). Initial resistance is now located at 1.2730 (Aug 23 low) followed by 1.2933 (August 6 high)

Yen – 84.50

Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.20 (August 24 high) followed by 86.38 (July 28 high).

Pound – 1.5490

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 1.5518 (August 24 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.8855

Initial support at 0.8781 (38.2% retrace of 0.8067-0.9222) 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 – 1239

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 – 72.80

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

CURRENCY TRADING SUMMARY – 25th August (00:30 GMT)

Written by Anthony Darvall

U.S. Dollar Trading (USD) had a volatile trading day with USD strength on the back of risk aversion in Europe reversed as US housing data weakened further. July Existing Home Sales fell 27% as the effect of the removal of the housing credit continues to be felt. In US stocks, DJIA -133 points closing at 10040, S&P -15 points closing at 1051 and NASDAQ -35 points closing at 2123. Looking ahead, July Durable Goods are forecast at 2.8% vs. -1.2% previously. Also released, July New Home Sales are forecast to remain at 0.33mn.

The Euro (EUR) tested 1.2600 as EUR/JPY followed USD/JPY to fresh decade lows and stock markets around the globe fell. Some weak US data allowed a bounce to 1.2700 but a S&P downgrade of long term debt from Ireland sent the Euro lower in late US trade. EUR/USD traded with a low of 1.2586 and a high of 1.2721 before closing at 1.2660. Looking ahead, German IFO Business Climate forecast at 105.7 vs. 106.2 previously

The Japanese Yen (JPY) the market finally broke through Y85 to fresh 15 year lows below Y84.70 and tested Y84 quickly on massive stoploss selling. EUR/JPY and AUD/JPY also broke key levels and the market will be closely watching the reaction from the BOJ today in Asia. Overall the USDJPY traded with a low of 83.57 and a high of 85.18 before closing the day around 84.40 in the New York session.

The Sterling (GBP) support at 1.5500 gave way and heavy GBP/JPY selling pushed the pair to month lows at 1.5370. The other big move came in the EUR/GBP which rallied to above 0.8200. Overall the GBP/USD traded with a low of 1.5370 and a high of 1.5508 before closing the day at 1.5430 in the New York session.

The Australian Dollar (AUD) tracked stock markets lower to test 0.8800 support in the US session. The outlook for the AUD is darkening as the global recovery story comes under pressure. AUD/JPY broke under Y75 support and quickly plunged to Y73.60. Overall the AUD/USD traded with a low of 0.8794 and a high of 0.8908 before closing the US session at 0.8855.

Oil & Gold (XAU) picked up in volatility falling over $15 an ounce before rally aggressively on USD weakness post Housing data. Overall trading with a low of USD$1209 and high of USD $1235 before ending the New York session at USD$1230 an ounce. Oil came under heavy pressure heading towards the key $70 level. WTI Oil Closed -$1.47 at $71.63 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2660

Initial support at 1.2604 (61.8% retrace of 1.2152-1.3334) followed by 1.2523 (July 13 low). Initial resistance is now located at 1.2730 (Aug 23 low) followed by 1.2933 (August 6 high)

Yen – 84.45

Initial support is located at 84.16 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.20 (August 24 high) followed by 86.38 (July 28 high).

Pound – 1.5425

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 1.5518 (August 24 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.8855

Initial support at 0.8781 (38.2% retrace of 0.8067-0.9222) 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 – 1231

Initial support at 1210 (Aug 13 low) followed by 1190 (Aug 10 low). Initial resistance is now at 1244 (July 1 high) followed by 1265 (June 21 high).

Oil – 71.80

Initial support at 71.00 (Intraday Support) followed by 70.00 (Intraday Support). Initial resistance is now at 72.50(Intraday Resistance) followed by 75.00 (Intraday Resistance).