Euro Falls on Spain Downgrade
CURRENCY TRADING SUMMARY – 31st May (00:30GMT)
U.S. Dollar Trading (USD) was under pressure until the Fitch Downgrade of Spain put downside pressure on stocks and and the Euro. Markets we less volatile however as the Holiday weekend in the US caused volumes to be less than usual. Chicago PMI fell from 59.7 vs. 63.8 previously. In US stocks, DJIA -122 points closing at 10136, S& P -13 points closing at 1089 and NASDAQ -20 points closing at 2257. Looking ahead, Memorial Day Holiday.
The Euro (EUR) was able to break above 1.2400 quickly tested 1.2450 before Fitch Downgraded Spain from AAA to AA+ and the pair eased for the rest of the day. EUR/JPY exaggerated the moves and ended at day lows near Y111.50. EUR/USD traded with a low of 1.2271 and a high of 1.2452 before closing at 1.2276. Looking ahead, May Inflation is forecast at 1.6% vs. 1.5% y/y.
The Japanese Yen (JPY) hit week highs on the USD/JPY and AUD/JPY before the Fitch news seek risk aversion higher again but the market is starting to recover and further gains ahead of this weeks US Job numbers are possible. Overall the USDJPY traded with a low of 90.61 and a high of 91.41 before closing the day around 90.85 in the New York session. Looking ahead, April Housing Starts are forecast at 6.6% vs. -2.4% previously.
The Sterling (GBP) tested above 1.4600 as the recovery envelope was pushed but failed to make further gains and when the Euro news broke the pair fell quickly to close below 1.4500. Weekend news included the resignation of a Liberal Democrat in a political scandal that may hurt the coalition. Overall the GBP/USD traded with a low of 1.4435 and a high of 1.4610 before closing the day at 1.4458 in the New York session. Looking ahead, UK holiday.
The Australian Dollar (AUD) was able to shrug off the North Korea tensions and continue to remain buoyant as AUD/JPY buying underpinned. The Euro news did drag the pair higher but with gold and Oil continuing to be well supported the AUD is sitting in a much stronger position than last week. Overall the AUD/USD traded with a low of 0.8430 and a high of 0.8551 before closing the US session at 0.8459.
Oil & Gold (XAU) closed unchanged on the day as buyer emerged on a dip towards $1200 in a relatively quiet range. Overall trading with a low of USD$1201 and high of USD$1215 before ending the New York session at USD$1213 an ounce. Consolidated Thursday’s rally with a small pull back. WTI Oil Closed -$0.58 at $73.97 a barrel.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2135 |
1.2144 |
1.2310 |
1.2587 |
1.2747 |
|
USD/JPY |
89.81 |
90.61 |
91.40 |
91.88 |
92.97 |
|
GBP/USD |
1.4231 |
1.4366 |
1.4470 |
1.4703 |
1.4918 |
|
AUD/USD |
0.8067 |
0.8202 |
0.8490 |
0.8579 |
0.8725 |
|
XAU/USD |
1166.00 |
1185 |
1213 |
1229 |
1250.00 |
|
OIL/USD |
70.00 |
72.50 |
74.30 |
75.00 |
76.00 |
Euro – 1.2310
Initial support at 1.2144 (May 19 low) followed by 1.2135 (0.50 of 0.8232-1.6039). Initial resistance is now located at 1.2587 (May 24 high) followed by 1.2747 (May 12 high)
Yen – 91.40
Initial support is located at 88.97 (May 20 low) followed by 87.95 (May 6 low). Initial resistance is now at 91.88 (May 20 low) followed by 92.97 (May 18 high).
Pound – 1.4470
Initial support at 1.4231 (Mary 20 low) followed by 1.4111 (March 18 2009 low). Initial resistance is now at 1.4703 (May 14 High) followed by 1.4918 (May 13 low).
Australian Dollar – 0.8490
Initial support at 0.8529 (May 20 high) followed by the 0.7828 ( 2009 low). Initial resistance is now at 0. 8499 (May 18 low) followed by 0.8725 (May 19 high).
Gold – 1213
Initial support at 1166 (May 21 low) followed by 1146 (April 27 low). Initial resistance is now at 1229 (Key level) followed by 1250 (1123.90 plus 1.618 of 1085.3-1170.1).
Oil – 74.30
Initial support at 72.50 (Intraday Support) followed by 70.00 (Intraday Support). Initial resistance is now at 75.00 (March high) followed by 76.00 (Intraday Resistance).
