Currency Updates:
U.S. Dollar Trading (USD) the markets had a quiet day on Monday with UK away on Bank holiday and a small rally in Europe reversed later in the US session. Some positivity is coming through on the Greece front with hopes of some flexibility towards the struggling EZ country helping the EUR/USD remain strong. The USD risk event of the week is the Jackson Hole Speech on Friday by Bernanke so aggressive trading is unlikely until then. Looking ahead, June Case Shiller House Prices forecast at 1.6% vs. 2.2% previously m/m. Also August Consumer Confidence forecast at 66 vs. 65.9 previously.
The Euro (EUR) some comments from ECB member Asmussen hurt the EUR/USD in late US trade with comments that the ECB will only buy bonds after the ESM and even this was conditional. The remarks were taken as downplaying the chance of the ECB intervening in the bond markets in a aggressive fashion. Support at 1.2500 has been broken in Asian trade but we have only fallen to 1.2465 so far.
The Japanese Yen (JPY) the USD/JPY reversed from Y78.80 to Y78.50 in Asia Tuesday after the Japanese Government downgraded its economic outlook with the EUR/JPY and AUD/JPY also falling sharply. Strong support is seen between Y78.50-78.00 and we should break below before Friday.
The Sterling (GBP) the GBP/USD eased for a third day back under 1.5800 and the uptrend in under threat if 1.5750 breaks today. The general outlook is linked with the Euro and Friday’s USD event will also be a big mover for the Pound. Looking ahead, German GFK Consumer Sentiment is forecast at 5.9% vs. 5.9% previously.
Australian Dollar (AUD) the AUD/USD continued to struggle all day with the China slowdown story and some local mining slowdown news creating an air of uncertainty. Gold and Oil fell sharply overnight and the AUD/USD fell to 1.0350 support. The downside is significant if the trend changes we could see sub 1.000 levels.
Oil & Gold (XAU) Gold topped out and reversed under heavy selling pressure with longs booking profit from the recent sharp rally higher. OIL/USD was aggressive on the downside with the market free falling from $97 to $95 in one hour during the US open.
