Trichet talks rate hikes and inflation risks, Euro and Crude Oil surge.
CURRENCY TRADING SUMMARY – 6th June 2008 (00:30GMT)
·U.S. Dollar Trading (USD) after trading near weekly highs against all the majors early in the European session the dollar had an abrupt turn last night on the back of ECB president Trichet’s comments alluding to a rate rise in July “I didn’t say it’s certain. I said it’s possible”. As the Euro climbed it dragged Crude Oil and most other currencies with it. Economic data out last night included the Weekly Jobless claims stronger at 357K vs. 374K expected.The US share markets had a good rally on positive Wal-Mart reports and Oil gains, the NASDAQ was up 46.80 (1.87%) and the Dow Jones was up 213.97 points (-1.73%). Crude Oil closed up $5.49 ending the New York session at $127.79 per barrel. Looking ahead, NonFarm Payrolls forecasted at -50k and Unemployment rate expected to rise from 5.0% to 5.1%.
·The Euro (EUR) initially trading at weekly lows on stronger US data, but rallied over 2 big figures on Hawkish ECB comments. Citing the ECB mandate to anchor inflation expectations, Trichet warned the ECB will act in a timely manner. Overall the EUR/USD traded with a low of 1.5365 and a high of 1.5598 before closing the day at 1.5594 in the New York session. Looking ahead, German Industrial Production expected at 0.2%.
·The Japanese Yen (JPY) was sold heavily as key resistance levels were broken and equities rallied. EURJPY was the star performer trading above key 165 level for new yearly highs. Overall the USDJPY traded with a low of 105.21 and a high of 106.44 before closing the day around 105.89 in the New York session.
·The Sterling (GBP) traded at weekly lows before the Bank of England decision to keep rates on hold prompted a recovery which was extended by the Euro’s rally. Overall the GBP/USD traded with a low of 1.9464 and a high of 1.9596 before closing the day at 1.9586 in the New York session.
·The Australian Dollar (AUD) kept to a fairly tight range as conflicting forces pushed and pulled, USD strength and gold weakness weighed early on the Aussie which recovered to highs on ECB comments and the commodities rally. AUD/JPY made fresh highs solidifying recent gains. In economic news Aprils Trade Balance came in stronger than expected at -.95B vs. the -1.7B forecast. Overall the AUDUSD traded with a low of 0.9512 and a high of 0.9589 before closing the day at 0.9580 in the New York session.
·Gold (XAU) had a volatile trading day with USD strength and weakness dictating direction. Overall trading with a low of $865 and high of $880 ending the New York session at $878 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.5288 |
1.5366 |
1.5590 |
1.5598 |
1.5628 |
|
USD/JPY |
104.54 |
105.21 |
105.90 |
106.65 |
107.44 |
|
GBP/USD |
1.9363 |
1.9454 |
1.9590 |
1.9637 |
1.9741 |
|
AUD/USD |
0.9430 |
0.9488 |
0.9590 |
0.9633 |
0.9639 |
|
XAU/USD |
860.50 |
865.10 |
878.00 |
897.30 |
909.85 |
·Euro – 1.5590
Initial support at 1.5366 (Jun 5 low) followed by 1.5288 (May 8 reaction low). Initial resistance is now located 1.5598 (Jun 5 High) at followed by 1.5628 (Jun 3 high).
·Yen – 105.90
Initial support is located at 105.21 (June 5 low) followed by 104.54 (Jun 4 low). Initial resistance is now at 106.65 (Feb 28 high) followed by 107.44 (61.8% retracement of the 114.66 to 95.76).
·Pound – 1.9590
Initial support at 1.9454 (May 19 low) followed by 1.9363 (May 14 low). Initial resistance is now at 1.9637 (June 4 high) followed by 1.9741 (Jun 3 high)
·Australian Dollar – 0.9590
Initial support at .9488 (Jun 4 low) followed by 0.943 (61.8% retracement 0.9291 to 0.9655). Initial resistance is now at 0.9633 (Jun 4 high) followed by 0.9639 (May 29 high).
·Gold – 878
Initial support at 865.1 (May 30 low) followed by 860.5 (May 14 low). Initial resistance is now at 897.3 (Jun 2 high) followed by 909.85 (May 28 high).
