US stocks Rally, Oil Bounces
CURRENCY TRADING SUMMARY – 19th August (00:30GMT)
U.S. Dollar Trading (USD) lost some ground as risk aversion abated and markets around the world bounced. Oil rallied over 5% as Chinese optimism returned and a report about US Oil Inventories inspiring fresh buying. July Build Permits forecast at 0.58m were .56m and Housing starts forecast at 0.6m were 0.581m. July PPI Forecast at -0.3% came in at -0.9%. July Core PPI forecast at 0.1% came in at -0.1%. Crude Oil Closed up $2.44 at $69.20. In US share markets, S& P ended +10 points (+1.01%) at 989, NASDAQ ended +25 points (+1.3%) at 1955 and DOW JONES ended +82 points (0.90%) at 9220. Looking ahead, Crude Oil Inventories forecast at 1.1m vs. 2.5m previously.
The Euro (EUR) enjoyed gains but was contained to the topside by strong resistance at the 1.4150 level. August German ZEW Current Conditions surged to -77 vs -89 previously. Better risk appetite is keeping the bears at bay for now. Overall the EUR/USD traded with a low of 1.4070 and a high of 1.4155 before closing at 1.4140 Looking ahead, German PPI forecast at -0.2% vs. -0.1% previously.
The Japanese Yen (JPY) lost ground against most pairs as the market pared gains seen on Monday’s heavy stock falls. USD/JPY raced ahead in Asia to break above 95 yen before being pushed lower in the US on broad dollar weakness. GBP/JPY was the best performer as cable surged on better economic data. Overall the USDJPY traded with a low of 94.47 and a high of 95.29 before closing the day around 94.70 in the New York session.
The Sterling (GBP) broke above 1.6500 as July CPI remained higher than expected at 1.8% vs. 1.5% forecast. The unexpected news started a debate about future UK rate hikes if inflation grows. Also helping the pair higher was the $3 spike in Oil and the heavy GBP/JPY buying. Overall the GBP/USD traded with a low of 1.6329 and a high of 1.6590 before closing the day at 1.6560 in the New York session. Looking ahead, August CBI orders forecast at -50 vs. -59.
The Australian Dollar (AUD) was extremely positive with a major deal with China to supply 20 years of gas worth $50Bn and AUD/JPY buying on the back of stock gains. The risk sensitive currency has had wild swings in recent days as the market struggles with Shanghai losses vs recovery optimism. RBA minutes were neutral to hawkish as forecast with the focus on raising rates coming as no surprise. Overall the AUD/USD traded with a low of 0.8196 and a high of 0.8270 before closing the US session at 0.8260.
Gold (XAU) bounced but underperformed the rest of the commodities. Overall trading with a low of USD$934 and high of USD$941 before ending the New York session at USD$938 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3833 |
1.4008 |
1.4130 |
1.4327 |
1.4447 |
|
USD/JPY |
93.10 |
94.02 |
94.75 |
95.49 |
96.73 |
|
GBP/USD |
1.6034 |
1.6266 |
1.6550 |
1.6665 |
1.6719 |
|
AUD/USD |
0.7925 |
0.8126 |
0.8260 |
0.8478 |
0.8519 |
|
XAU/USD |
918.00 |
925.00 |
939.00 |
960.00 |
971.00 |
Euro – 1.4130
Initial support at 1.4008 (July 29 low) followed by 1.3833 (Jul 8 low). Initial resistance is now located at 1.4327 (Aug 13 high) followed by 1.4447 (Aug 5 High)
Yen – 94.75
Initial support is located at 94.02 (July 29 low) followed by 93.10 (July 22 low). Initial resistance is now at 95.49 (August 14 high) followed by 96.73 (Aug 12 high).
Pound – 1.6550
Initial support at 1.6266 (July 17 low) followed by 1.6034 (Jul 13 low). Initial resistance is now at 1.6665 (AUG 13 high) followed by 1.6719 (AUG 10 high).
Australian Dollar – 0.8260
Initial support at 0.8126 (July 29 low) followed by the 0.7925 (July 15 low). Initial resistance is now at 0.8478 (Aug 14 high) followed by 0.8519 (Sep 22 high).
Gold – 939
Initial support at 925 (July 29 low) followed by 918 (July 14 low). Initial resistance is now at 960 (August 13 high) followed by 971 (Aug 6 high).
