Europe Inflation at 4%, Aussie hits 24 year highs against the Greenback
CURRENCY TRADING SUMMARY – 1st July 2008 (00:30GMT)
·U.S. Dollar Trading (USD) had a choppy day but was able to recover off lows and make small gains into the US session. Month end adjustment’s and more talk from US treasury Paulson on the strong dollar policy supported. The June Chicago PMI was better than expected at 49.6 bouncing from May’s 48.2. In U.S. share markets, the NASDAQ was down 22 points (-0.98%) and the Dow Jones was up 3 points (0.03%). Crude Oil closed flat ending the New York session at $140.20 per barrel. Looking ahead, May construction spending is forecast to continue is downward slide to -0.6% from Aprils -0.4%. June ISM manufacturing is expected to remain below 50 in a contractionary position at 48.6 (May 49.6).
·The Euro (EUR) found trading above 1.5800 temporary even as the June Eurozone Inflation Report came in at 4.0% on the high end of expectations. The elevated Euro levels brought more overvalued comments this time from French President Sarkozy and ECB’s Almunia. Overall the EUR/USD traded with a low of 1.5732 and a high of 1.5836 before closing the day at 1.5757 in the New York session. Looking ahead, May German Retail Sales seen at 0.5% up from Aprils -0.6%. Euro zone PMI Manufacturing for June expected at 49.1 and the May Unemployment rate forecasted to hold steady at 7.1%.
·The Japanese Yen (JPY) lead by the USD/JPY rebounded of 105 to close above 106 dragging the crosses higher. Steadier stocks and strong month end demand supported. Overall the USDJPY traded with a low of 104.99 and a high of 106.47 before closing the day around 106.05 in the New York session. Looking ahead, 2nd Quarter Tankan Large Manufacturing Index seen at 3 along with Tankan Capex estimate at 2%. Update Tankan Large manufacturing Index at5 for 2nd Quarter.
·The Sterling (GBP) had a very whippy day tracking the USD strength lower but supported was twice below 1.99. GFK Consumer confidence fell to -34 in June dropping from -29 in May with consumers not expecting the economic situation to improve. Overall the GBP/USD traded with a low of 1.9882 and a high of 1.9966 before closing the day at 1.9927 in the New York session. Looking ahead, June PMI Manufacturing expected 49.8 slightly lower than May’s 50.
·The Australian Dollar (AUD) traded at multi year highs of .9667 on the back of soaring commodities prices but was unable to maintain this level as the USD gain strength in the US session. AUD/NZD traded lower dipping below the 1.26 level as NZD/USD strengthened overnight. Overall the AUD/USD traded with a low of 0.9552 and a high 0.9667 before closing the day at 0.9587. Looking ahead, RBA Interest rate Decision widely expected to remain on hold at 7.25%. Markets will be focusing on the accompanying statement for future rate direction.
·Gold (XAU) rallied to multi month highs as Crude Oil scaled new record highs but eased into the US session as Oil pared gains and USD gained some strength. Overall trading with a low of USD$918.80 and high of USD$935.35 ending the New York session at USD$925 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.5628 |
1.5720 |
1.5755 |
1.5836 |
1.5844 |
|
USD/JPY |
104.42 |
104.99 |
106.15 |
106.47 |
107.22 |
|
GBP/USD |
1.9715 |
1.9806 |
1.9925 |
1.9967 |
2.0027 |
|
AUD/USD |
0.9542 |
0.9554 |
0.9585 |
0.9689 |
0.9700 |
|
XAU/USD |
885.10 |
910.60 |
925.00 |
935.40 |
939.25 |
·Euro – 1.5755
Initial support at 1.5720 (June 27 low) followed by 1.5628 (June 26 low). Initial resistance is now located 1.5836 (Jun 30 High) at followed by 1.5844 (Jun 9 high).
·Yen – 106.15
Initial support is located at 104.99 (June 30 low) followed by 104.42 (Jun 9 low). Initial resistance is now at 106.47 (Jun 30 high) followed by 107.22 (Jun 27 high).
·Pound – 1.9925
Initial support at 1.9806 (June 27 low) followed by 1.9715 (Jun 26 low). Initial resistance is now at 1.9967 (Jun 30 high) followed by 2.0027 (Apr 21 high)
·Australian Dollar – 0.9585
Initial support at 0.9554 (June 30 low) followed by 0.9543 (June 27 low). Initial resistance is now at 0.9689 (Intraday channel resistance) followed by 0.9700 (Round number resistance).
·Gold – 925
Initial support at 910.6 (Jun 27 low) followed by 885.1 (Jun 26 low). Initial resistance is now at 935.4 (May 22 high) followed by 939.25 (50% retrace of 1032-846 decline).
