US Housing Data Continues to Strengthen
CURRENCY TRADING SUMMARY – 5th August (00:30GMT)
U.S. Dollar Trading (USD) strong pending home sales +3.6% in June kept risk appetite going in the US session after bouts of profit taking in the Asian and European session. The USD followed the same pattern stronger in Asia and Europe before falling back to the lows against most pairs. Personal Income fell -1.3% in June for the biggest drop in 4 years. Crude Oil Closed down $0.16 at $71.42. In US share markets, S& P ended +3 points (0.30%) at 1005, NASDAQ ended +2 points (0.1%) at 2011 and DOW JONES ended +33 points (0.3%) at 9320. Looking ahead, ADP Employment Report forecast at -345k vs. -473k previously.
The Euro (EUR) kept to a very tight range supported under 1.4400 but capped below 1.4450 as the market consolidated the previous days rally. June PPI fell -6.6% y/y as prices continued to fall on weak demand and rising Euro. Overall the EUR/USD traded with a low of 1.4366 and a high of 1.4433 before closing at 1.4420. Looking ahead, June retail Sales forecast at 0.2% vs. -0.4% previously.
The Japanese Yen (JPY) heavy profit taking helped push the USD/JPY through the rising trend line from June and initiated a stop-loss run into 94.35 before bouncing quickly back strong US housing data. AUD/JPY was especially well supported on the dip breaking back above 80 Yen. Overall the USDJPY traded with a low of 94.33 and a high of 95.49 before closing the day around 95.25 in the New York session.
The Sterling (GBP) failed to break 1.700 after testing it twice in Asia and pulled back into Europe. Support below 1.6900 was strong the pair kept to the 1.69-1.70 range for the rest of the day. UK PMI continued the strong UK data theme at 47 in July vs. 44.5 previously. Overall the GBP/USD traded with a low of 1.6888 and a high of 1.7008 before closing the day at 1.6945 in the New York session. Looking ahead, Halifax HPI is forecast at 0.7% vs. -0.5% previously and July Services PMI is forecast at 51.9 vs. 51.6 previously.
The Australian Dollar (AUD) was volatile at fresh year highs after the RBA shifted the rate outlook to neutral from dovish at the August meeting. Mixed Retail sales data down -1.4% vs. 0.6% forecast and +2.0% q/q confounded the market. New highs above 0.8470 were quickly pulled back as profit taking hit the Aussie for the rest of the day. Overall the AUD/USD traded with a low of 0.8384 and a high of 0.8473 before closing the US session at 0.8440. UPDATE June Trade Balance better than expected at -0.44b vs. -0.79bn forecast.
Gold (XAU) broke above $963 resistance with news out of south Africa of possible power cuts providing fresh buying. Overall trading with a low of USD$951 and high of USD$970 before ending the New York session at USD$965 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4207 |
1.4338 |
1.4410 |
1.4445 |
1.4621 |
|
USD/JPY |
93.10 |
94.02 |
95.25 |
95.88 |
96.24 |
|
GBP/USD |
1.6474 |
1.6697 |
1.6935 |
1.7198 |
1.7518 |
|
AUD/USD |
0.8238 |
0.8340 |
0.8440 |
0.8519 |
0.8694 |
|
XAU/USD |
925.00 |
932.00 |
965.00 |
970.00 |
990.00 |
Euro – 1.4410
Initial support at 1.4338 (June 3 low) followed by 1.4207 (AUG 3 low). Initial resistance is now located at 1.4445 (Jun 3 high) followed by 1.4621 (61.8% retrace 1.6038 -1.2330 )
Yen – 95.25
Initial support is located at 94.02 (Jul 29 low) followed by 93.10 (July 22 low). Initial resistance is now at 95.88 (Jul 6 high) followed by 96.24 (July 6 high).
Pound – 1.6935
Initial support at 1.6397 (AUG 3 low) followed by 1.6474 (Jul 31 low). Initial resistance is now at 1.7198 (Oct 21 high) followed by 1.7518 (Oct 20 high).
Australian Dollar – 0.8440
Initial support at 0.8340 (AUG 3 low) followed by the 0.8238 (July 31 low). Initial resistance is now at 0.8519 (Sept 22 high) followed by 0.8694 (Aug 28 low).
Gold – 965
Initial support at 932 (July 31 low) followed by 925 (July 29 low). Initial resistance is now at 970 (AUG 4 high) followed by 990 (June 3 high).
