Dollar weakness continues
CURRENCY TRADING SUMMARY – 2nd June (00:30GMT)
U.S. Dollar Trading (USD) a triple barrage of higher risk appetite, commodity prices and higher stocks sent the dollar to fresh year lows. ISM manufacturing improved to 42.8 vs. 42.5 forecast at the economy continues to rebound. Oil continued to rally on the back of the broad USD weakness. Crude Oil finished up $2.27 to finish the day at $68.50 a barrel. In US share markets, the Nasdaq was up 54 points or 3.06% and the Dow Jones was up 221 points or 2.60%. Looking ahead, April Pending Home Sales are forecast at 0.5% vs. 3.2% previously.
The Euro (EUR) surged through the 1.4200 level before settling in an upper range for the rest of the day. Some USD strength was seen on the back of increasing long term US interest rates. EUR/JPY surged towards 137 before easing slightly at the close. Overall the EUR/USD traded with a low of 1.3944 and a high of 1.4168 before closing at 1.4135. Looking ahead, April Unemployment Rate is forecast at 9.1% vs. 8.9% previously.
The Japanese Yen (JPY) strengthened as the USD slumped with support found at 94.50. US stocks rallied and the increase in treasury yields led to a powerful US session rally to just below 97 Yen. Crosses used the move to catapult to fresh year highs. Overall the USDJPY traded with a low of 94.43 and a high of 96.82 before closing the day around 96.40 in the New York session.
The Sterling (GBP) got right to work in Europe surging towards above 1.6400 to test 1.6500 before running out of steam. GBP/JPY and EUR/GBP also helped to propel the currency higher. Reasons for the recent demand for GBP are linked to the size of selling in 2008 and the recovery of the banking industry and the effect this has had on the UK economy. Overall the GBP/USD traded with a low of 1.6161 and a high of 1.6499 before closing the day at 1.6440 in the New York session. Looking ahead, April Mortgage Approvals are forecast at 41k vs. 39k previously.
The Australian Dollar (AUD) sellers at 0.8000 were disappointed by the lack of pull back and the pair jumped at the start of Europe to above 0.8100 where the pair remained for the rest of the night. AUD/JPY buying and buoyant commodities are helping the Aussie recover. April Retail Sales rise 0.3% vs. 0.5% forecast. Overall the AUD/USD traded with a low of 0.7990 and a high of 0.8156 before closing the US session at 0.8105. Looking ahead, RBA are forecast to hold at 3.0%.
Gold (XAU) failed at $990 but the markets looks set to test $1000 in coming sessions. Overall trading with a low of USD$973 and high of USD$989 before ending the New York session at USD$978 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3793 |
1.3926 |
1.4170 |
1.4364 |
1.4621 |
|
USD/JPY |
93.54 |
94.43 |
96.40 |
97.24 |
98.82 |
|
GBP/USD |
1.5757 |
1.5855 |
1.6455 |
1.6497 |
1.6672 |
|
AUD/USD |
0.7703 |
0.7803 |
0.8105 |
0.8152 |
0.8378 |
|
XAU/USD |
941.00 |
959.00 |
976.00 |
1006.00 |
1032.00 |
Euro – 1.4170
Initial support at 1.3926 (May 29 low) followed by 1.3793 (May 28 low). Initial resistance is now located at 1.4364 (Dec 29 high) followed by 1.4621 ()
Yen – 96.40
Initial support is located at 94.43 (Mar 25 low) followed by 93.52 (Mar 19 low). Initial resistance is now at 97.24 (May 28 high) followed by 98.82 (May 11 high).
Pound – 1.6455
Initial support at 1.5855 (May 28 low) followed by 1.5757 (May 22 low). Initial resistance is now at 1.6497 (June 1 high) followed by 1.6672 (Oct 30 high).
Australian Dollar – 0.8105
Initial support at 0.7803 (May 26 low) followed by the 0.7703 (May 29 low). Initial resistance is now at 0.8152 (76.4% retrace 0.8814 to 0.6009) followed by 0.8378 (Sep 26 high).
Gold – 976
Initial support at 959 (May 29 low) followed by 941 (May 26 low). Initial resistance is now at 1006 (Feb 20 high) followed by 1032 (Mar 17 high).
