Bailout Plan hitting roadblocks, Markets cautious
CURRENCY TRADING SUMMARY – 24thSeptember 2008 (00:30GMT)
·U.S. Dollar Trading (USD) was able to pare back some of the losses incurred since the start of the week but ongoing sentiment is mixed as the US bailout plan was experiencing some stalling as it progressed to the congress. US data was slightly weaker than expected with the Richmond Fed at -18 vs. -12 previously. US stocks were weak again with the biggest 2 day decline in 6 years. In the U.S. share markets, the NASDAQ was down 25 points (-1.18%) and the Dow Jones was down 161 points (-1.47%). Crude Oil closed down $2.76 ending the New York session at $106.61 per barrel. Looking ahead, August Home Sales expected at 4.93 vs. 5 Million in July. Bernanke Testifies again tonight at the Joint Economic Committee.
·The Euro (EUR) gave up some of the gains as traders took profit before Bernanke and Paulson testified before congress. The details of the assurances are still to be worked out but the US legislators agree something needs to be done. Weak stocks dragged the EUR/JPY down and this weighed on the EUR/USD which has made substantial gains some Monday. Overall the EUR/USD traded with a low of 1.4623 and a high of 1.4826 before closing the day at 1.4650 in the New York session. Looking ahead, September German IFO expected at 94.1 down from 94.8 in August. Also released the July Eurozone Current account previously at -8.2 Billion, forecast at -6.2 Billion.
·The Japanese Yen (JPY) took its cue from the equities, trading in a relatively stable range. Crosses were a little more volatile as the Majors exacerbated moves. Overall the USDJPY traded with a low of 105.17 and a high of 106.08 before closing the day around 105.50 in the New York session.
·The Sterling (GBP) tracked lower on USD strength but was relatively well supported as the market awaits details from the US bailout plan. The 1.8500 is forming as a key pivot level and price action been revolving around it. Overall the GDP/USD traded with a low of 1.8472 and a high of 1.8638 before closing the day at 1.8540 in the New York session. Looking Ahead, September CBI sales seen at -40 vs. -46 in July.
·The Australian Dollar (AUD) retreated after making substantial gains on Monday as foot dragging from some in the US congress hurt risk sentiment. Also weighing was the pull back in commodities from highs. Overall the AUD/USD traded with a low of 0.8280 and a high of 0.8470 before closing the US session at 0.8330.
·Gold (XAU) retreated from the $900 an ounce level as USD strengthened across the board and traders took profit ahead of the Bernanke/Paulson Testimonies. Overall trading with a low of USD$882.15 and high of USD$908.80 before ending the New York session at USD$892 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4437 |
1.4623 |
1.4665 |
1.4867 |
1.4908 |
|
USD/JPY |
103.54 |
105.15 |
105.75 |
107.47 |
108.03 |
|
GBP/USD |
1.8265 |
1.8472 |
1.8525 |
1.8642 |
1.8795 |
|
AUD/USD |
0.8011 |
0.8279 |
0.8345 |
0.8519 |
0.8534 |
|
XAU/USD |
863.00 |
882.05 |
886.00 |
909.80 |
919.00 |
·Euro – 1.4665
Initial support at 1.4623 (Sept 23 low) followed by 1.4437 (Sept 22 low). Initial resistance is now located at 1.4867 (Sept 23 high) at followed by 1.4908 (Aug 22 high).
·Yen – 105.75
Initial support is located at 105.15 (Sept 22 low) followed by 103.54 (Sept 16 low). Initial resistance is now at 107.47 (Sep 22 high) followed by 108.03 (Sept 19 high).
·Pound – 1.8525
Initial support at 1.8472 (Sept 23 low) followed by 1.8265 (Sept 22 low). Initial resistance is now at 1.8642 (Sep 22 high) followed by 1.8795 (Aug 21 High).
·Australian Dollar – 0.8345
Initial support at 0.8279 (Sept 23 low) followed by the 0.8011 (Sep 19 low). Initial resistance is now at 0.8519 (Sept 22 high) followed by 0.8534 (Sept 2 high).
·Gold – 886
Initial support at 882.05 (Sept 23 low) followed by 863 (Sept 22 low). Initial resistance is now at 909.8 (Sep 23 high) followed by 919 (Sept 18 high).
