Stocks Drop as Mood darkens
CURRENCY TRADING SUMMARY – 14th May (00:30GMT)
·U.S. Dollar Trading (USD) enjoyed a major reversal of direction with sentiment turning overnight. Weak US Retail Sales of -0.4% in April sent US stocks skidding over 2% down. Also dampening sentiment was the commentary from BOE’s King that the risk was skewed to a protracted economic downturn. Crude Oil was down -$1.60 ending the New York session at $57.88 per barrel. In US share markets, the Nasdaq was down 51 points or -3.00% and the Dow Jones was down 184 points or -2.18%. Looking ahead, Weekly Jobless Claims are forecast at 610k vs. 601k previously.
·The Euro (EUR) fell overnight although not as sharply as most currencies. During the Asian session the EUR/USD traded near 6 week highs above 1.3700. The main falls were seen in EUR/JPY which broke through 130 Yen. March Industrial Production was at -2% vs. -1% forecast. Overall the EUR/USD traded with a low of 1.3563 and a high of 1.3709 before closing at 1.3650.
·The Japanese Yen (JPY) strengthened considerably as the crosses joined the USD/JPY is sliding aggressively. AUD/JPY was a leader on the way up and also led on the way down. Overall the USDJPY traded with a low of 95.11 and a high of 96.71 before closing the day around 95.45 in the New York session. Looking ahead, March Machine Orders are forecast at -4.5% vs. 1.4% previously.
·The Sterling (GBP) fell back after the Bank of England inflation report showed that CPI should stay below 2% for the next 3 years. This slow recovery view is at odds with the green shoots commentary form other Central Banks around the world. EUR/GBP traded above 0.9000 before once again slipping form this key level. Overall the GBP/USD traded with a low of 1.5084 and a high of 1.5335 before closing the day at 1.5140 in the New York session.
·The Australian Dollar (AUD) fell heavily after failing at the 0.7700 for the second time. The sharp pullback in commodities also weighed. Risk appetite is a major source of direction for the commodity currency so equity markets are watched closely. Overall the AUD/USD traded with a low of 0.7507 and a high of 0.7708 before closing the US session at 0.7535.
·Gold (XAU) fell back after testing the $930 level as the USD strengthened into the close. Overall trading with a low of USD$916 and high of USD$931 before ending the New York session at USD$925 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3247 |
1.3343 |
1.3530 |
1.3739 |
1.3799 |
|
USD/JPY |
93.54 |
94.15 |
95.30 |
97.84 |
98.82 |
|
GBP/USD |
1.4944 |
1.5070 |
1.5105 |
1.5373 |
1.5477 |
|
AUD/USD |
0.7459 |
0.7508 |
0.7530 |
0.7738 |
0.8097 |
|
XAU/USD |
895.00 |
906.00 |
924.00 |
933.00 |
945.00 |
·Euro – 1.3530
Initial support at 1.3343 (May 8 low) followed by 1.3247 (May 6 low). Initial resistance is now located at 1.3739 (March 19 high) followed by 1.3799 (Jan 8 high)
·Yen – 95.30
Initial support is located at 94.15 (May 20 low) followed by 93.54 (Mar 19 low). Initial resistance is now at 97.84 (May 12 high) followed by 98.82 (May 11 high).
·Pound – 1.5105
Initial support at 1.5070 (May 11 low) followed by 1.4944 (May 7 low). Initial resistance is now at 1.5373 (Jan 8 high) followed by 1.5477 (38.2% retrace 1.3503-1.8669).
·Australian Dollar – 0.7530
Initial support at 0.7508 (May 8 low) followed by the 0.7459 (May 7 low). Initial resistance is now at 0.7738 (Oct 6 high) followed by 0.8097 (Sept 30 high).
·Gold – 924
Initial support at 906 (May 8 low) followed by 895 (May 6 low). Initial resistance is now at 933 (Apr 1 high) followed by 945 (Mar 26 high).
