Fresh Year Highs on S& P
Last week’s currency trading review
The Dollar broke to the downside on the back of soaring global stock markets and extremely strong global data. New Home Sales jumped 10% in June and Q2 GDP beat expectations down -1.0% vs. -1.4% previously. The Dollar was relatively unchanged against its two largest partners in the EURO and YEN but fell significantly against the Risk currencies and Commodities. The Euro tried twice to break above 1.4300 and was repelled making the currency under perform the rest of the market. EUR/GBP was under pressure and EUR/AUD made new year lows. EU CPI dropped -0.6% y/y vs. -0.1% previously. The EUR/USD gained 0.35% closing at 1.4255, after opening the week at 1.4205.
The Japanese Yen was relatively unchanged against the USD but lost a lot of ground against the carry trades of AUD/JPY and NZD/JPY which tracked the equity markets higher. Japanese data was weak with Retail Sales down -3.0% vs. -2.5% y/y and Tokyo CPI -1.7% y/y. The USD/JPY closed down -0.18% at 94.67 after opening the week at 94.67. The GBP was a big mover as the risk sentiment of investors improved and EUR/GBP sellers gained the upper hand. The pair finished at year highs above 1.6700. Nationwide HPI gained 1.3% vs. 0.3% forecast mapping 3 months in a row of gains. GBP/USD gained +1.71% closing at 1.6711 after opening at 1.6425. The AUD was the biggest gainer during the weak with Oil surging and AUD/JPY back towards 80 Yen. RBA Governor Stevens helped push the AUD/USD to fresh year highs as he signaled a shift in central bank attitude from dovish to neutral. The AUD/USD closed up 2.20% at 0.8355 after opening at 0.8171.
The forex trading week preview
In the States On Tuesday we have Pending Home Sales in June forecast at 0.6% vs. 0.1% previously. On Wednesday, ISM Non-manufacturing forecast at 48.vs 47 in July. On Thursday the main focus will be on Weekly Jobless claims forecast at 595K vs. 584k previously. On Friday the July Unemployment rate is forecast to rise to 9.6% vs. 9.5% previously and the Non Farm Payrolls change is forecast at -345k vs. -467k previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Wednesday, EU June Retail Sales forecast at 0.3% vs. -0.4% previously. On Thursday, ECB meet and are widely expected to hold at 1.0% but focus on the News Conference for clues about future Rates. On Friday, German June Trade balance is forecast at 10.8bn vs. 9.6bn previously. Also released German Industrial Production forecast at 0.5% vs. 3.7% previously. In the UK On Wednesday, Halifax HPI forecast at 0.7% vs. -0.5% previously. July Services PMI is forecast at 51.8 vs. 51.6 previously. On Thursday BOE announces Interest Rates and are expected to remain at 0.5% although focus will be on the QE program. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Thursday, June leading indicators are forecast at 79.7 vs. 76.0 previously. We will provide our previews and reviews of these data releases in the daily summary.
In Australia RBA statement the key event risk on Tuesday after the RBA meeting expected to hold at 3.0%. On Thursday, July Unemployment is forecast at -18k with a Unemployment rate rising to 6.0% vs. 5.8%. We will provide our previews and reviews of these data releases in the daily summary.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3833 |
1.4008 |
1.4250 |
1.4304 |
1.4338 |
|
USD/JPY |
93.10 |
94.02 |
94.75 |
96.24 |
97.19 |
|
GBP/USD |
1.6266 |
1.6311 |
1.6735 |
1.6745 |
1.7000 |
|
AUD/USD |
0.8090 |
0.8126 |
0.8375 |
0.8378 |
0.8519 |
|
XAU/USD |
918.00 |
925.00 |
954.00 |
958.00 |
965.00 |
Euro – 1.4250
Initial support at 1.4008 (Jul 29 low) followed by 1.3833 (Jul 8 low). Initial resistance is now located at 1.4304 (Jul 28 high) followed by 1.4338 (June 3 high)
Yen – 94.75
Initial support is located at 94.02 (Jul 29 low) followed by 93.10 (July 22 low). Initial resistance is now at 96.24 (Jul 6 high) followed by 97.19 (June 19 high).
Pound – 1.6735
Initial support at 1.6311 (July 22 low) followed by 1.6266 (Jul 13 low). Initial resistance is now at 1.6745 (Jun 30 high) followed by 1.7000 (Big Figure).
Australian Dollar – 0.8375
Initial support at 0.8126 (July 29 low) followed by the 0.8090 (July 21 low). Initial resistance is now at 0.8378 (Sept 26 high) followed by 0.8519 (Sept 22 low).
Gold – 954
Initial support at 925 (July 29 low) followed by 918 (July 14 low). Initial resistance is now at 958 (July 958 high) followed by 965 (June 10 high).
