GM rumors and Poor Jobs data pummel Dollar
CURRENCY TRADING SUMMARY – 27th June 2008 (00:30GMT)
·U.S. Dollar Trading (USD) was hit hard on rumours that General Motors was filing for Chapter 11 bankruptcy protection. Although denied later in the day the damage had been done with US stocks trading at 2008 lows. Reports that Citigroup would have heavy Q2 writedowns combined with Crude Oil above $140 per barrel sent risk aversion soaring putting heavy pressure on the Dollar through USD/JPY and USD/CHF sales. Final Q1 GDP came in at forecasts of 1.0% but weekly jobless claims disappointed at 384K. May home sale surprised to the upside at 4.99 Million vs. 4.93 expected up 2% for the month. In U.S. share markets, the NASDAQ was down 79.89 points (-3.33%) and the Dow Jones was down 358 (3.03%). Crude Oil closed up $5.09 ending the New York session at $139.64 per barrel. Looking ahead, May Core PCE projected at 0.2% with Private Consumption at 0.6%. Also released is the Final Revised Michigan Consumer Confidence expected at 57.
·The Euro (EUR) jumped to week highs as Oil Surged through $140 and Gold rallied through the $910 resistance. EUR/JPY retreated from record highs of 169.45 as risk aversion spiked. German May import Prices expected at 1.4% came in higher at 2.4%. Overall the EUR/USD traded with a low of 1.5628 and a high of 1.5768 before closing the day at 1.5755 in the New York session. Looking ahead, Eurozone Consumer sentiment forecasted at -16 for June and German Retail sales for May expected at 0.5%. ECB President Trichet is also scheduled to speak.
·The Japanese Yen (JPY) made good gains across the board after heavy losses on stocks prompted safe haven flows. Many crosses were trading at yearly highs during the Asian session before US session falls. May data released included CPI at 1.5% (1.4% expected), Retail sales 0.2% (0.0% expected), Industrial output 2.9% (2.7% expected) and the Unemployment Rate remaining at 4% as expected. Overall the USDJPY traded with a low of 106.61 and a high of 108.19 before closing the day around 106.82 in the New York session.
·The Sterling (GBP) had a very good night with heavy buying seen as the USD capitulated and Oil surged. The cable broke above critical resistance of 1.9850 and reported major stops were hit allowing it to hold on to most of the gains into the day’s close. Overall the GBP/USD traded with a low of 1.9715 and a high of 1.9895 before closing the day at 1.9890 in the New York session. Looking ahead, Q1 GDP forecast at 0.4% and Q1 Current account expected at -12 Billion.
·The Australian Dollar (AUD) traded above 0.9600 briefly as Gold surged back above $900. The Aussie was unable to hold at these levels as increasing risk saw unwinding of the carry trade with massive AUD/JPY selling putting pressure on the AUD/USD. AUD/NZD trading at year high’s above 1.2650 as NZD GDP came in -0.3% for the Q1. Overall the AUD/USD traded with a low of 0.9552 and a high 0.9610 before closing the day at 0.9560.
·Gold (XAU) rallied with Oil and safe haven flows supporting breaking above $900 and then the key resistance areas of $907-10 an ounce.Overall trading with a low of USD$885 and high of USD$917.60 ending the New York session at USD$917 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.5461 |
1.5537 |
1.5745 |
1.5769 |
1.5844 |
|
USD/JPY |
106.24 |
106.54 |
106.95 |
108.61 |
108.98 |
|
GBP/USD |
1.9580 |
1.9715 |
1.9870 |
1.9966 |
2.0027 |
|
AUD/USD |
0.9491 |
0.9532 |
0.9555 |
0.9611 |
0.9648 |
|
XAU/USD |
558.00 |
874.50 |
913.00 |
918.00 |
931.00 |
·Euro – 1.5745
Initial support at 1.5537 (June 25 low) followed by 1.5461 (June 17 low). Initial resistance is now located 1.5769 (Jun 26 High) at followed by 1.5844 (Jun 9 high).
·Yen – 106.95
Initial support is located at 106.54 (June 11 low) followed by 106.24 (Jun 10 low). Initial resistance is now at 108.61 (Feb 14 high) followed by 108.98 (Jan 14 high).
·Pound – 1.9870
Initial support at 1.9715 (June 26 low) followed by 1.9580 (Jun 20 low). Initial resistance is now at 1.9966 (April 28 high) followed by 2.0027 (Apr 21 high)
·Australian Dollar – 0.9555
Initial support at 0.9532 (June 25 low) followed by 0.9491 (June 20 low). Initial resistance is now at 0.9611 (June 26 high) followed by 0.9648 (Jun 9 high).
·Gold – 913
Initial support at 874.5 (Jun 12 low) followed by 858 (Jun 12 low). Initial resistance is now at 918 (June 26 high) followed by 930.9 (May 27 high).
