When UK’s away, Pound comes out to play
CURRENCY TRADING SUMMARY – 26thAugust 2008 (00:30GMT)
·U.S. Dollar Trading (USD) received a major boost through a sizable cable sell off during the Asian session dragging down all the majors against the greenback. Sentiment slowly reversed during the remainder of the day picking up speed as US equities tumbled on reports another US bank failed and speculation of large write downs in Q3. July Existing Home Sales supported rising 3.1% to 5 Million from 4.85 Million in June. In the U.S. share markets, the NASDAQ was down 49 points (-2.03%) and the Dow Jones was down 241 points (-2.08%). Crude Oil closed up $0.50 ending the New York session at $115.10 per barrel. Looking ahead, the Case Shiller Home price index is forecast to drop -0.8% in June. Conference Board Consumer Confidence is expected to increase to 53 from 51.9 in August. July New Home Sales are expected to remain 530K.
·The Euro (EUR) came under pressure falling in sympathy with the large falls in Cable before reversing as US equities turned south. Oil was unable to maintain gains and its pullback weighed on the single currency into the US close. Overall the EUR/USD traded with a low of 1.4696 and a high of 1.4809 before closing the day at 1.4755 in the New York session. Looking ahead, German GDP Q2 expected at -0.5% along with Consumer Confidence expected at 2 down slightly from 2.1. Also released, IFO Index forecast down slightly to 97.1.
·The Japanese Yen (JPY) gained again falling off the 110 level as risk aversion spiked on continued rumbling of global banking issues. GBY/JPY came under heavy pressure during the Asian session. Overall the USDJPY traded with a low of 109.02 and a high of 110.29 before closing the day around 109.30 in the New York session.
·The Sterling (GBP) lead the fall in the Asian session as stops below 1.8500 were cleared inducing an 80 pip fall to multi-year lows. Support was found in the European session although trading was light as UK was away on a bank Holiday. USD weakness during the US session turned the rebound into a rally but gains were pared to end the day roughly where we began. Overall the GBP/USD traded with a low of 1.8405 and a high of 1.8590 before closing the day at 1.8530 in the New York session.
·The Australian Dollar (AUD) fell in sympathy with the cable but was able to track higher during the rest of the day as stable gold prices supported. AUD/JPY came under pressure as stocks weakened. Overall the AUD/USD traded with a low of 0.8615 and a high of 0.8690 before closing the US session at 0.8740. UPDATE AUD/USD Breaks below .8600 in Asian Trade.
·Gold (XAU) was unable to capitalize on increasing risk aversion as Oil pared gains and USD strengthened. Overall trading with a low of USD$817.50 and high of USD$825.70 before ending the New York session at USD$822 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4673 |
1.4697 |
1.4715 |
1.4901 |
1.4963 |
|
USD/JPY |
108.04 |
108.43 |
109.40 |
110.29 |
110.67 |
|
GBP/USD |
1.8385 |
1.8406 |
1.8465 |
1.8787 |
1.8901 |
|
AUD/USD |
0.8515 |
0.8580 |
0.8585 |
0.8807 |
0.8846 |
|
XAU/USD |
801.00 |
812.30 |
818.00 |
838.60 |
846.00 |
·Euro – 1.4715
Initial support at 1.4697 (Aug 22 low) followed by 1.4673 (Aug 20 low). Initial resistance is now located 1.4901 (Aug 22 low) at followed by 1.4963 (23.6% retrace 1.6038 to 1.4631).
·Yen – 109.40
Initial support is located at 108.43 (Aug 22) followed by 108.04 (38.2% retrace 103.78 to 110.67). Initial resistance is now at 110.29 (Aug 25 high) followed by 110.67 (Aug 15 high).
·Pound – 1.8465
Initial support at 1.8406 (Aug 25 low) followed by 1.8385 (July 25 2006 low). Initial resistance is now at 1.8787 (Aug 14 high) followed by 1.8901 (23.6% retrace 2.0157 to 1.8513).
·Australian Dollar – 0.8585
Initial support at 0.8580 (trendline support) followed by 0.8515 (Jan 15 low). Initial resistance is now at 0.8807 (Aug 22 High) followed by 0.8846(Aug 12 high).
·Gold – 818
Initial support at 812.3 (Aug 22 low) followed by 801 (Aug 20 low). Initial resistance is now at 838.60 (Aug 21 high) followed by 846 (Former May 2 support).
