Downside Support Found, Market Rallies
CURRENCY TRADING SUMMARY – 18th August (00:30 GMT)
Written by Anthony Darvall
U.S. Dollar Trading (USD) eased throughout the day as market fear subsided and stocks rallied in Europe and the US. Economic data was upbeat with July Industrial Production +1.0% vs. +0.5% forecast m/m. Also released, July Housing Starts +1.7% although still weak. In US stocks, DJIA +103points closing at 10405, S& P +13 points closing at 1092 and NASDAQ +27 points closing at 2209. Looking ahead, Weekly Crude Oil Inventories forecast at -1.1mln vs. -3mln previously.
The Euro (EUR) was able to rally on a combination of positive risk sentiment and strong bond auctions from Spain and Ireland to test resistance above 1.2900. August German ZEW Economic Sentiment Survey slipped to 14 vs. 21.1 previously. EUR/JPY hit month lows in Asia but was able to rally throughout the day to end above Y110. EUR/USD traded with a low of 1.2803 and a high of 1.2917 before closing at 1.2870.
The Japanese Yen (JPY) USD/JPY failed to break through Y85.20 supports and grinded higher for the rest of the day on strong US data and talks in the market that PM Kan will meet with BOJ Shirakawa. AUD/JPY led the market higher in Asia and remains in good demand. Overall the USDJPY traded with a low of 85.17 and a high of 85.70 before closing the day around 85.45 in the New York session.
The Sterling (GBP) struggled to track the Euro and the Aussie higher as July CPI came in at 3.1% vs. 3.2% previously y/y. The big move came in the EUR/GBP which rallied back towards 0.8300 after heavy selling last week. Overall the GBP/USD traded with a low of 1.5549 and a high of 1.5698 before closing the day at 1.5575 in the New York session. Looking ahead, BoE Meeting Minutes released.
The Australian Dollar (AUD) was able to rally from the start of Asia for a big move back above 0.9000 to test 0.9080 resistance. AUD/JPY was strong as were most crosses with the high yielding Aussie outperforming in the ‘risk on’ environment. RBA minutes offered little extra to direction reiterating current policy was appropriate. Overall the AUD/USD traded with a low of 0.8944 and a high of 0.9082 before closing the US session at 0.9050. Looking ahead, Q2 Wage Price Index forecast at 0.9%.
Oil & Gold (XAU) Gold was very quiet in a tight range above $1220. Overall trading with a low of USD$1222 and high of USD $1229 before ending the New York session at USD$1225 an ounce. Crude Oil made small gains ahead of tonight’s key US Oil data release. WTI Oil Closed +$0.53 at $75.77 a barrel.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2523 |
1.2737 |
1.2875 |
1.2933 |
1.3334 |
|
USD/JPY |
83.50 |
84.73 |
85.60 |
86.66 |
88.12 |
|
GBP/USD |
1.5125 |
1.5400 |
1.5575 |
1.5713 |
1.5999 |
|
AUD/USD |
0.8508 |
0.8738 |
0.9050 |
0.9080 |
0.9389 |
|
XAU/USD |
1190.00 |
1210 |
1225 |
1244 |
1265.00 |
|
OIL/USD |
72.50 |
75 |
75.75 |
77 |
78.00 |
Euro – 1.2875
Initial support at 1.2737 (July 22 low) followed by 1.2523 (July 13 low). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3334 (August 6 high)
Yen – 85.60
Initial support is located at 84.73 (August 11 low) followed by 83.50 (June 1995 low). Initial resistance is now at 86.66 (August 3 high) followed by 88.12 (July 28 high).
Pound – 1.5575
Initial support at 1.5400 (July 26 low) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5713 (August 12 high) followed by 1.5999 (Aug 6 high).
Australian Dollar – 0.9050
Initial support at 0.8738 (July 22 high) followed by the 0.8508 (61.8% retrace of 0.8067-0.9222). Initial resistance is now at 0. 9080 (August 17 high) followed by 0.9222 (Aug 6 high).
Gold – 1225
Initial support at 1210 (Aug 13 low) followed by 1190 (Aug 10 low). Initial resistance is now at 1244 (July 1 high) followed by 1265 (June 21 high).
Oil – 75.75
Initial support at 75.00 (Intraday Support) followed by 72.50 (Intraday Support). Initial resistance is now at 77.00 (Intraday Resistance) followed by 78.00 (Intraday Resistance).
