Currency Updates:
U.S. Dollar Trading (USD) with little movement in stocks, traders used headlines from Europe for most of the day’s movement. EU President Van Rompuy backed the ECB and reiterated that the EU was ready to act on Spain’s Bank Sector but no additional Aid had been requested. US data was mixed with June Case Shiller House Price Index forecast at +0.5% vs. -0.1% previously. Looking ahead, July Pending Home Sales forecast at 1% vs. -1.4% previously. Q2 GDP forecast at 1.7% vs. 1.5% previously.
The Euro (EUR) the EU President comments and news Merkal will be traveling to China to garner support for Europe helped lift the EUR/USD to 1.2570. The next resistance level is at 1.2600 but we may see the level hold for now with the Jackson Hole event capping aggressive moves higher.
The Japanese Yen (JPY) USD/JPY is finding support above Y78.50 but barely moving this week as the USD risk event on Friday keeps traders sidelined. Further talk of QE3 from FED Chief Bernanke will see the Y78 level tested whilst delaying or downplaying will see the uptrend return.
The Sterling (GBP) the GBP/USD rebounded above 1.5800 and is well positioned for further gains with the recent 3 day pullback finding support near the upwards trend line at 1.5750. Little in the way of data this week will keep traders looking to technical and external factors for fresh direction. Looking ahead, no economic data tonight
Australian Dollar (AUD) AUD/USD found support at 1.0350 and was able to bounce slightly on Tuesday but sellers came in to quickly cap the risk sensitive currency near 1.0380. Stock market direction will be the main driver this week with the RBA meeting next week the main risk event on the Horizon. On Thursday, Q2 Australian CAPEX forecast at 3.1% vs. 6.1% previously.
Oil & Gold (XAU) continued to consolidate at the recent highs finding support at $1660 and resistance above $1670 overnight. OIL/USD was supported by tropical storms in the US and stable stock markets.
