Euro’s Future Shaky
Last week’s currency trading review
The Dollar enjoyed the EUR/USD inspired gains across the board. Oil was down over $7 a barrel and stocks finished under pressure as the Eurozone debt crisis refused to go away. The US Trade Balance weakened to -40.4bn in March as the US imported more petroleum than forecast. Also released, April Retail Sales at 0.4% vs. 0.3% forecast. The Euro traded near 2 year lows at 1.2330 on the back of rumors that France could be downgraded and that France’s President Sarkozy threatened to quit the EU region during the Greece Bailout negotiations. Also adding to the woes was deadly riots in Greece and a sharp reversal from Monday’s relief rally. The EUR/USD lost -3.18% closing at 1.2358, after opening the week at 1.2751.
The Japanese Yen ended the week on the front foot but was slightly weaker than the dollar which gained the title of safe haven of choice. Some concerns are beginning to be heard about the Japanese Debt situation which could inspire fresh ratings downgrades as the economy struggles to combat deflation and government deficits.The USD/JPY fell +0.91% closing at 92.44, after opening at 91.60 previously. The GBP enjoyed a brief rally on Monday as the conservatives formed an alliance with the Liberal Democrats and optimism pushed the pair back above 1.5000. The mood changed in the later half of the week however as EU concerns and bearish comments from BOE Governor King sent the Pound Spiraling lower. TheGBP/USD fell -1.80% closing at 1.4539 after opening at 1.4801. The AUD reacted to good Employment numbers pushing the Aussie back above 0.9000 but like the rest of the market the Aussie succumbed to selling pressure on Thursday and Friday falling heavily. April Employment Change was +33.7k vs. +22.6k forecast. The AUD/USD gained -0.28% closing at 0.8856 after opening at 0.8881.
The forex trading week preview
In the States On Monday, March TIC Flows forecast at 50bn vs. 47bn previously. On Tuesday, April Housing Starts are forecast at 650k vs. 626k previously. On Wednesday, April CPI is forecast at 2.4% vs. 2.3%. Also released, May FOMC Minutes. On Thursday, Weekly Jobless Claims are forecast at 440k vs. 444k previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Tuesday, May German Zew is Forecast at 46 vs. 53 previously. April CPI is forecast at 1.5% vs. 1.4% previously. On Friday, German May IFO is forecast at 101.8 vs. 101.6 previously. Also released, EU PMI Services forecast at 55.4 vs. 55.6 previously and PMI Manufacturing forecast at 57 vs. 57.6 previously. In the UK On Tuesday, April CPI is forecast at 3.5% vs. 3.4% previously. On Wednesday, BOE minutes. On Friday, April Mortgage approvals. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Thursday, Q1 GDP is forecast at 1.4% vs. 0.9% previously. On Friday, BOJ target Rate forecast at 0.1%. In Australia On Tuesday, RBA Minutes from the May Meeting. 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 |
1.2102 |
1.2330 |
1.2360 |
1.2747 |
1.2818 |
|
USD/JPY |
90.28 |
91.52 |
92.25 |
94.19 |
94.99 |
|
GBP/USD |
1.4398 |
1.4477 |
1.4510 |
1.4918 |
1.5068 |
|
AUD/USD |
0.8579 |
0.8716 |
0.8840 |
0.9136 |
0.9275 |
|
XAU/USD |
1171.00 |
1198 |
1233.00 |
1250 |
1261.00 |
|
OIL/USD |
68.50 |
70 |
71.50 |
72.5 |
75.00 |
Euro – 1.2360
Initial support at 1.2330 (October 28 2008 low) followed by 1.2102 (April 2006 low). Initial resistance is now located at 1.2747 (May 12 high) followed by 1.2818 (May 11 high)
Yen – 92.25
Initial support is located at 91.52 (0.382 of 88.26-93.54) followed by 90.28 (0.618 of 88.26-93.54). Initial resistance is now at 94.19 (May 6 low) followed by 94.99 (May 5 high).
Pound – 1.4510
Initial support at 1.4477 (May 7 low) followed by 1.4398 (April 22 2009 low). Initial resistance is now at 1.4918 (May 13 High) followed by 1.5068 (May 5 low).
Australian Dollar – 0.8840
Initial support at 0.8716 (Mar 6 low) followed by the 0.8579 (Feb 2 low). Initial resistance is now at 0.9136 (April 28 low) followed by 0.9275 (May 4 high).
Gold – 1233
Initial support at 1198 (May 11 low) followed by 1171 (May 6 low). Initial resistance is now at 1250 (Key level) followed by 1261 (1123.90 plus 1.618 of 1085.3-1170.1).
Oil – 71.50
Initial support at 70.00 (Intraday Support) followed by 68.50 (Intraday Support). Initial resistance is now at 72.50 (March high) followed by 75.00 (Intraday Resistance).
