USD rebounds off lows
CURRENCY TRADING SUMMARY – 28th May (00:30GMT)
U.S. Dollar Trading (USD) tested new lows in the Asian and European sessions before rebounding sharply into the close of the day. US stocks sold off in the afternoon on the back of rising US Treasury Yields hurting investor sentiment in stocks and Commodities. Existing Home Sales are forecast at 4.68M vs. 4.65M forecast. Crude Oil finished up $2.20 to finish the day at $63.20 a barrel. In US share markets, the Nasdaq was down 19 points or -1.11% and the Dow Jones was down 173 points or -2.05%. Looking ahead, Weekly Jobless Claims are forecast at 630k and New Home Sales (April) are forecast at 0.36M vs. 0.356M previously.
The Euro (EUR) struggled at the 1.4000 level before falling heavily in the final hours of the day on the back on rising US yields. The pair fell to 1.3850 but speculated support failed to appear and the slide continued into Thursday. Also hurting the sentiment was a FDIC report with a negative outlook on US loan quality. German CPI fell to 0.0% on a y/y basis. Overall the EUR/USD traded with a low of 1.3822 and a high of 1.3998 before closing at 1.3980.
The Japanese Yen (JPY) kept to a very tight range as the USD strengthened and Yen weakened broadly together. Most of the crosses were under pressure from the rise in risk aversion although USD/JPY was very well supported on dips under 95. Overall the USDJPY traded with a low of 94.64 and a high of 95.74 before closing the day around 95.40 in the New York session. UPDATE April Retail Sales are forecast at -2.9% vs. -3.3%.
The Sterling (GBP) broke comfortably back above 1.6000 the highest level since January as EUR/GBP selling and the UK mortgage industry showed signs of rebounding off November lows. The late equity pull back saw the 1.6000 handle being given up on profit taking. Further gains will require the continuing recovery of global financial system. Overall the GBP/USD traded with a low of 1.5924 and a high of 1.6089 before closing the day at 1.5970 in the New York session.
The Australian Dollar (AUD) failed at 0.7900 and the late drop in US stocks prompted heavy selling/long liquidation and the pair slipped to 0.7750. Although Commodities rallied in the US, the AUD rally is starting to show signs of exhaustion. Overall the AUD/USD traded with a low of 0.7743 and a high of 0.7894 before closing the US session at 0.7780. Looking ahead, Q1 Capex forecast at -7% vs. 6% previously.
Gold (XAU) continued in the recent orbit around $950 an ounce as Gold demand was countered by USD strength. Overall trading with a low of USD$943 and high of USD$960 before ending the New York session at USD$947 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3531 |
1.3728 |
1.3830 |
1.4058 |
1.4148 |
|
USD/JPY |
92.52 |
93.54 |
95.35 |
96.70 |
97.84 |
|
GBP/USD |
1.5576 |
1.5757 |
1.5950 |
1.6198 |
1.6464 |
|
AUD/USD |
0.7630 |
0.7703 |
0.7765 |
0.7929 |
0.8097 |
|
XAU/USD |
925.00 |
936.00 |
945.00 |
967.00 |
978.00 |
Euro – 1.3830
Initial support at 1.3728 (May 21 low) followed by 1.3728 (May 21 low). Initial resistance is now located at 1.4058 (Jan 2 high) followed by 1.4148 (Dec 31 high)
Yen – 95.35
Initial support is located at 93.54 (Mar 19 low) followed by 92.52 (Mar 19 low). Initial resistance is now at 96.70 (May 19 high) followed by 97.84 (May 19 high).
Pound – 1.5950
Initial support at 1.5757 (May 22 low) followed by 1.5576 (23.6% retrace 1.4398 to 1.5944). Initial resistance is now at 1.6198 (Nov 5 high) followed by 1.6464 (Oct 31 high).
Australian Dollar – 0.7765
Initial support at 0.7703 (May 26 low) followed by the 0.7630 (May 19 low). Initial resistance is now at 0.7929 (50% retracement of 0.9847-0.6012 decline) followed by 0.8097 (Sep 30 high).
Gold – 945
Initial support at 936 (May 21 low) followed by 925 (May 20 low). Initial resistance is now at 967 (Mar 20 high) followed by 978 (Feb 25 high).
