Rise in Crude Inventories drop Oil, Boosts stock and USD
CURRENCY TRADING SUMMARY – 17th July 2008 (00:30GMT)
·U.S. Dollar Trading (USD) was able to make solid gains yesterday as US data came out mostly dollar positive. US crude Inventories unexpectedly gained 3.0M Barrels leading to a sharp sell off in the Crude Oil Futures. The drop in oil combined with positive results from Wells Fargo for a significant relief rally in the equity markets. June US CPI came in very high at 1.1% vs. expectations 0.7% and on top of 0.6% in May confirming that inflation was becoming a problem in the world largest economy and sparking speculation of interest rate rises sooner rather than later. June Industrial production surprised to the upside at 0.5% along with an increase in Capacity to 79.9% from 79.4% in May. Fed Chief Bernanke spoke again last night in his second night testifying before congress. The FOMC minutes from the June meeting were mostly looked over as Bernanke gave more up to date and detailed responses over the last 2 days. In the U.S. share markets, the NASDAQ was up 69.14 points (3.12%) and the Dow Jones was up 276 points (2.52%). Crude Oil closed down $4.14 ending the New York session at $134.60 per barrel. Looking ahead, June Housing starts are seen at .960 Million down slightly from .975 in May. Weekly Jobless claims are seen 380K after last week surprised drop at 346K. The Philly Fed is seen at -15 in July after falling to -17.1 in June.
·The Euro (EUR) dropped in sympathy with the large sell off in Oil and Gold. Euro Sentiment has soured slightly as economic conditions continued to weaken suggesting there will be little decoupling from US problems. June CPI was confirmed at 4.0% y/y. Overall the EUR/USD traded with a low of 1.5801 and a high of 1.5948 before closing the day at 1.5817 in the New York session. Looking ahead, the June HICP is seen at 0.4% after jumping 0.6% last month.
·The Japanese Yen (JPY) was able to make good gains as Europeans shares traded lower but reversed as positive data out of the US initiated stock gains. EUR/JPY traded at multi week lows of 165.35. Overall the USDJPY traded with a low of 103.77 and a high of 105.12 before closing the day around 105.10 in the New York session.
·The Sterling (GBP) had a fairly mixed day with cable breaking below the key 2.00 level on US strength. UK data continued to under perform with June Claimant Count rising to 15.5K vs. expectations of 10K in its fastest rate in 15 years. Average earning rose by 3.8% in May. Overall the GBP/USD traded with a low of 1.9958 and a high of 2.0097 before closing the day at 1.9984 in the New York session.
·The Australian Dollar (AUD) pulled back from all time highs as commodities were broadly lower lead by Oil. AUD/JPY bounce off what is becoming a solid support at 101.40 as equities recovered and risk appetite increased. RBA governor Stevens spoke yesterday and was relatively dovish commenting that “in the future we will look back at this period as one of high interest rates” .Overall the AUD/USD traded with a low of 0.9730 and a high of 0.9815 before closing the day at 0.9738.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.5612 |
1.5765 |
1.5845 |
1.5948 |
1.6038 |
|
USD/JPY |
106.69 |
103.78 |
104.85 |
105.14 |
106.28 |
|
GBP/USD |
1.9815 |
1.9933 |
2.0005 |
2.0157 |
2.0193 |
|
AUD/USD |
0.9664 |
0.9708 |
0.9760 |
0.9818 |
0.9849 |
|
XAU/USD |
954.85 |
957.90 |
964.00 |
981.21 |
988.00 |
·Euro – 1.5845
Initial support at 1.5765 (July 11 low) followed by 1.5612 (July 7 low). Initial resistance is now located 1.4948 (July 16 high) at followed by 1.6036 (July 15 High).
·Yen – 104.85
Initial support is located at 103.78 (July 16 low) followed by 103.69 (38.2% retracement of 0.9576-108.59). Initial resistance is now at 105.14 (July 16 high) followed by 106.28 (July 15 high).
·Pound – 2.0005
Initial support at 1.9933 (July 15 low) followed by 1.9815 (July 14 low). Initial resistance is now at 2.0157 (July 15 high) followed by 2.0193 (Mar 27 high)
·Australian Dollar – 0.9760
Initial support at 0.9708 (July 15 low) followed by 0.9664 (July 14 low). Initial resistance is now at 0.9818 (July 16 high) followed by 0.9849 (July 15 High).
·Gold – 964
Initial support at 957.9 (Jul 16 low) followed by 954.85 (Jul 14 low). Initial resistance is now at 981.25 (July 15 high) followed by 988.0 (July 15 high).
