USD recieves a boost from ISM Manufacturing Survey, Gold still shining.
CURRENCY TRADING SUMMARY – 2nd July 2008 (00:30GMT)
·U.S. Dollar Trading (USD) saw some continued weakness early in the European session as potential profit warnings from UBS and Deutsche Bank sent European and US futures into deep negative territory. A surprising jumpin June ISM manufacturing index to 50.2 put the sector in expansion territory for the first time in 5 months. Economist’s were looking for a weaker 48.6 figure and combined with a relief rally in the US stocks the Dollar was able to rally off lows. In U.S. share markets, the NASDAQ was up 11 points (0.52%) and the Dow Jones was up 32 points (0.28%). Crude Oil closed up $0.77 ending the New York session at $140.97 per barrel. Looking ahead, ADP Employment Report for June expected at -20K down from May’s 40K. May Factory Orders expected at 0.4% falling form Aprils 1.1%.
·The Euro (EUR) received a boost from a strong rebound in German Retail Sales at 1.3% in May vs. -0.6% in April. Attempts above 1.5800 were short lived however with profit taking pushing the pair into its more comfortable 1.5750-90 range. Stronger US data and a barrage of weak third tier data helped to also cap with market seen consolidating before the ECB rate announcement on Thursday. Overall the EUR/USD traded with a low of 1.5723 and a high of 1.5818 before closing the day at 1.5789 in the New York session. Looking ahead, we have ECB president Trichet speaking and May PPI expected to rise to 0.9% from 0.8% in April.
·The Japanese Yen (JPY) banking rumours lead the Yen to make good gains on rising risk aversion before reversing on positive US data and equities. The Yen was also supported by the Tankan Large manufacturing Index of 5 for 2nd Quarter beating expectations of 3. Overall the USDJPY traded with a low of 105.33 and a high of 106.39 before closing the day around 106.05 in the New York session.
·The Sterling (GBP) shrugged off weak UK data to test the key 2.00 level on the cable. Nationwide House prices continued to fall -0.9% in June m/m and -6.3% y/y. The June Manufacturing PMI capped the rally though with a disappointing 45.8(forecast 49.8).Overall the GBP/USD traded with a low of 1.9890 and a high of 2.006 before closing the day at 1.9941 in the New York session.
·The Australian Dollar (AUD) came under pressure after the RBA held rates and released a relatively neutral statement disappointing the Aussie bulls. The statement suggested that the current monetary policy was appropriate and that substantial tightening of financial conditions had occured. Overall the AUD/USD traded with a low of 0.9512 and a high 0.9594 before closing the day at 0.9525. Looking ahead, May retails sales are expected to be slightly positive and Building permits are expected to fall -3% m/m after Aprils 6.7% rise.
·Gold (XAU) broke through some key resistances on route to new multi month highs with Oil remaining strong and rising risk aversion seen supporting. Overall trading with a low of USD$922 and high of USD$946.50 ending the New York session at USD$940 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.5628 |
1.5720 |
1.5790 |
1.5836 |
1.5844 |
|
USD/JPY |
104.42 |
104.99 |
106.00 |
106.47 |
107.22 |
|
GBP/USD |
1.9806 |
1.9881 |
1.9950 |
2.0008 |
2.0027 |
|
AUD/USD |
0.9491 |
0.9512 |
0.9545 |
0.9670 |
0.9700 |
|
XAU/USD |
885.10 |
910.60 |
939.00 |
946.40 |
953.00 |
·Euro – 1.5790
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 – 106.00
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 – 1.9950
Initial support at 1.9881 (June 30 low) followed by 1.9806 (Jun 27 low). Initial resistance is now at 2.0008 (July 1 high) followed by 2.0027 (Apr 21 high)
·Australian Dollar – 0.9585
Initial support at 0.9512 (July 1 low) followed by 0.9491 (June 20 low). Initial resistance is now at 0.9670 (Jun 30 high) followed by 0.9700 (Round number resistance).
·Gold – 939
Initial support at 910.6 (Jun 27 low) followed by 885.1 (Jun 26 low). Initial resistance is now at 946.4 (July 1 high) followed by 953.0 (April 17 high).
