Oil breaks $110 a barrel, Dollar Surges
CURRENCY TRADING SUMMARY – 3rdSeptember 2008 (00:30GMT)
·U.S. Dollar Trading (USD) made significant gains as Oil dropped below $110 a barrel, especially against the commodity Bloc currencies. US August ISM Manufacturing came in near expectations at 49.9 vs. 50 previously. Oil driven stock gains were unable to be maintained as banks came under pressure one again. In the U.S. share markets, the NASDAQ was down 18 points (-0.77%) and the Dow Jones was down 26.50 points (-0.23%). Crude Oil closed down $-5.75 ending the New York session at $109.71 per barrel. Looking ahead, July Factory Orders are forecast to temper slightly to 1% from 1.7% in June.
·The Euro (EUR) hit 7 month lows below 1.45 as Oil hit lows of $105 per barrel. July PPI fell slightly below forecasts at 1.1% vs. 1.3% expected but still significantly higher than long term averages. Overall the EUR/USD traded with a low of 1.4466 and a high of 1.4617 before closing the day at 1.4520 in the New York session. Looking ahead, August PMI Services are expected at 48.2. Also released July Retail Sales forecast to be flat 0.0% m/m and -2.1% y/y. Eurozone Q2 GDP revised GDP expected to remain at -0.2% Q/Q vs. 0.7% Q1.
·The Japanese Yen (JPY) after heavy gains on the crosses lead by AUD/JPY and GBY/JPY a broad based recovery on the back of buoyant stocks was lead by the USD/JPY. BOJ Governor Shirakawa spoke of downsides risks for growth but expected inflation to mediate. Overall the USDJPY traded with a low of 107.77 and a high of 109.19 before closing the day around 108.70 in the New York session.
·The Sterling (GBP) came under continued downside pressure as an OECD report predicted a UK recession. New Multi ear lows were touched as commodities slump and EUR/GBP hit record highs around .8160. Overall the GDP/USD traded with a low of 1.7778 and a high of 1.8002 before closing the day at 1.7820 in the New York session. Looking ahead, August PMI services are expected to fall slightly to 47 from 47.4.
·The Australian Dollar (AUD) enjoyed a brief bounce after a less dovish than expected statement accompanying the 25bps rate cut. The rate cut was the first in Australia for 7 years and came after numerous economic reports pointed to a sharp slowdown. Subsequent falls in commodities provided the catalyst for a significant sell off with the AUD falling over 2 cents before recovering. Overall the AUD/USD traded with a low of 0.8270 and a high of 0.8534 before closing the US session at 0.8380. Looking ahead, Q2 GDP is forecast at 0.4% down slightly from 0.6% in Q1.
·Gold (XAU) fell heavily as Oil continued to slide breaking the Key $800 level before recovering as Oil retraced some losses. Overall trading with a low of USD$791.30 and high of USD$818.75 before ending the New York session at USD$818 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4366 |
1.4440 |
1.4530 |
1.4617 |
1.4728 |
|
USD/JPY |
107.29 |
107.63 |
108.60 |
109.18 |
110.29 |
|
GBP/USD |
1.7680 |
1.7754 |
1.7835 |
1.8015 |
1.8211 |
|
AUD/USD |
0.8173 |
0.8271 |
0.8370 |
0.8535 |
0.8586 |
|
XAU/USD |
773.50 |
783.35 |
805.00 |
835.60 |
844.00 |
·Euro – 1.4530
Initial support at 1.4440 (Feb 7 low) followed by 1.4366 (Jan 22 low). Initial resistance is now located at 1.4617 (Sept 2 high) at followed by 1.4728 (Sept 1 high).
·Yen – 108.60
Initial support is located at 107.63 (Aug 29 low) followed by 107.29 (Aug 1 low). Initial resistance is now at 109.18 (Sep 2 high) followed by 110.29 (Aug 25 high).
·Pound – 1.7835
Initial support at 1.7754 (Apr 21 2006 low) followed by 1.7680 (Apr 18 2006). Initial resistance is now at 1.8015 (Sep 2 high) followed by 1.8211 (Sept 1 high).
·Australian Dollar – 0.8370
Initial support at 0.8271 (Sept 2 low) followed by 0.8173 (Sep 10 2007 low). Initial resistance is now at 0.8535 (Sep 2 High) followed by 0.8586 (Sept 1 high).
·Gold – 805
Initial support at 783.35 (Aug 19 low) followed by 773.5 (Aug 15 low). Initial resistance is now at 835.6 (Sep 1 high) followed by 844 (Aug 28 high).
