Lehman Brothers Bankrupt, Stocks crash
CURRENCY TRADING SUMMARY – 16thSeptember 2008 (00:30GMT)
·U.S. Dollar Trading (USD) was sold very heavily in the Asian session as news of Lehman Brothers bankruptcy sent shockwaves through the markets. Europe bought the dollar back while heavy losses on the stock market kept liquidity low and risk aversion extremely high. US data was weak but overlooked as bigger events took precedence, US New York Fed Index fell -7 vs. +3 previously. The US fed announced extraordinary measures to sure up the Financial markets including more liquidity and expanded the scope of collateral accepted. In the U.S. share markets, the NASDAQ was down 81.36 points (-4.42%) and the Dow Jones was down 504 points (-3.6%). Crude Oil closed down $5.47 ending the New York session at $95.71 per barrel. Looking Ahead, FOMC Interest Rate Announcement with markets expecting a possible cut in rates to 1.75% form 2.00% after stock crash last night. US CPI for August expected at -0.1%.
·The Euro (EUR) traded in an extremely volatile fashion, gaining to highs in the Asian session before been sold off quite heavily in illiquid conditions falling over 400 pips. Q2 Labor Costs fell to 2.7% from 3.3%. Overall the EUR/USD traded with a low of 1.4085 and a high of 1.4482 before closing the day at 1.4260 in the New York session. Looking ahead, Eurozone August CPI is expected down -0.2%. Also released September ZEW Economic Sentiment expected at -53 from -55.5.
·The Japanese Yen (JPY) was the main gainer yesterday as the market dealt with the financial storm. Gapping lower at the start of the day over 200 pips on the USD/JPY, the Yen maintained strength throughout the day making year lows on the AUD/JPY. Tracked equities gaining the most as Wall St Losses accelerated to the downside. Overall the USDJPY traded with a low of 104.66 and a high of 107.55 before closing the day around 105.50 in the New York session.
·The Sterling (GBP) also traded in an extremely volatile fashion breaking above 1.80 early Asia before falling heavily on GBY/JPY sales. GBY/JPY fell over 600 pips from Friday nights close. Overall the GDP/USD traded with a low of 1.7766 and a high of 1.8130 before closing the day at 1.8000 in the New York session. August CPI is expected to rise 0.5%. August Retail Price Index expected to gain 0.4%.
·The Australian Dollar (AUD) gained against the USD initially but came under extreme selling pressure from the AUD/JPY. As US stocks continued to plunge support for the AUD finally gave way and late US trading saw the Aussie plunge. Overall the AUD/USD traded with a low of 0.8012 and a high of 0.8254 before closing the US session at 0.8050. Looking Ahead, September RBA minutes.
·Gold (XAU) made solid gains as safe haven flows flooded into he precious metal. Gains were less than expected given the market turmoil as Oil fell over $5 per barrel. Overall trading with a low of USD$765 and high of USD$784 before ending the New York session at USD$783 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3973 |
1.4085 |
1.4220 |
1.4481 |
1.4544 |
|
USD/JPY |
103.77 |
104.54 |
104.30 |
106.91 |
107.99 |
|
GBP/USD |
1.7542 |
1.7767 |
1.7920 |
1.8124 |
1.8206 |
|
AUD/USD |
0.7675 |
0.7900 |
0.7980 |
0.8263 |
0.8300 |
|
XAU/USD |
746.39 |
764.69 |
779.00 |
790.60 |
805.15 |
·Euro – 1.4420
·Yen – 104.30
Initial support is located at 104.54 (Sept 15 low) followed by 103.77 (Jul 16 low). Initial resistance is now at 106.91 (Sep 15 high) followed by 107.99 (Sept 12 high).
·Pound – 1.7920
Initial support at 1.7767 (Sept 15 low) followed by 1.7542 (Sept 12 low). Initial resistance is now at 1.8124 (Sept 15 high) followed by 1.8206 (Sep 1 high).
·Australian Dollar – 0.7980
Initial support at 0.7900 (Sept 11 low) followed by 0.7675 (Aug 20, 2007 low). Initial resistance is now at 0.8263 (Sept 15 High) followed by 0.8300 (Big Figure).
·Gold – 779
Initial support at 764.69 (Sept 15 low) followed by 746.39 (Sept 12 low). Initial resistance is now at 790.6 trendline resistance followed by 805.15 (Sep 9 high).
