Europe Cuts Interest Rates
CURRENCY TRADING SUMMARY – 8th May (00:30GMT)
·U.S. Dollar Trading (USD) came under pressure against riskier currencies as investors bought the Euro after milder than expected Quantitative easing measures from the ECB Thursday. Weekly Jobless Claims beat forecasts for the second week at 601K vs. 635K forecast. Crude Oil was down $0.11 ending the New York session at $56.33 per barrel. In US share markets, the Nasdaq was down 42 points or -2.44% and the Dow Jones was down 102 points or -1.2%. Looking ahead, Non-Farm Payrolls Forecast at -590K vs. -663K previously with the Unemployment Rate jumping to 8.9% vs. 8.5%.
·The Euro (EUR) was range bound while the market awaited the ECB Rate Decision. The decision to cut by 0.25% was widely expected and attention now turns to the press conference. The announcement of new measures was discounted as not true Quantitative Easing and the market bought the Euro aggressively to test highs above 1.3400. Weakness in US stocks towards the end of the day prompted mild profit taking. Overall the EUR/USD traded with a low of 1.3250 and a high of 1.3475 before closing at 1.3390. Looking ahead, March Industrial Output is forecast at -1.5% vs.-2.9% previously.
·The Japanese Yen (JPY) was sold from the opening as the Nikkei surged over 3% in a catch up move for the 3 days missed earlier in the week. USD/JPY broke above 99 in Europe. Most of the crosses enjoyed gains led by the AUD/JPY. Overall the USDJPY traded with a low of 98.39 and a high of 99.80 before closing the day around 99.15 in the New York session. Looking ahead, BOJ meeting minutes released.
·The Sterling (GBP) was very well supported in Asia but this changed in Europe as the BOE surprised the market by expanding their Quant Easing program from 75 to 125 Billion Pounds. The Pound slide hard and continued to be under pressure in the US session as equity losses mounted. Overall the GBP/USD traded with a low of 1.4942 and a high of 1.5199 before closing the day at 1.5035 in the New York session. Looking ahead, PPI Core forecast at 0.1% vs. 0.2% previously.
·The Australian Dollar (AUD) had another very strong day on the back of April Unemployment data. Unemployment Change was forecast at -25K but came in at a surprisingly strong +27K. The Unemployment rate dropped to 5.4% vs. 5.9% forecast. Overall the AUD/USD traded with a low of 0.7457 and a high of 0.7618 before closing the US session at 0.7530. Looking ahead, RBA Quarterly Monetary Policy Statement.
·Gold (XAU) spiked higher as USD weakness and gains in other metals spurred buying. A sharp pull back after the ECB meeting to opening levels is keeping the market outlook mixed to bullish. Overall trading with a low of USD$908 and high of USD$925 before ending the New York session at USD$912 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3121 |
1.3212 |
1.3400 |
1.3538 |
1.3582 |
|
USD/JPY |
97.15 |
97.94 |
99.25 |
99.75 |
100.43 |
|
GBP/USD |
1.4704 |
1.4836 |
1.5045 |
1.5373 |
1.5477 |
|
AUD/USD |
0.7233 |
0.7337 |
0.7565 |
0.7738 |
0.8097 |
|
XAU/USD |
878.00 |
895.00 |
910.00 |
933.00 |
945.00 |
·Euro – 1.3400
Initial support at 1.3212 (38.2% retrace 1.2889-1.3736) followed by 1.3121 (Apr 29 low). Initial resistance is now located at 1.3538 (76.4% retrace 1.2886 to 1.3736) followed by 1.3582 (Apr 6 high)
·Yen – 99.25
Initial support is located at 97.94 (May 6 low) followed by 97.15 (Apr 30 low). Initial resistance is now at 99.75 (Apr 17 high) followed by 100.43 (Apr 14 high).
·Pound – 1.5045
Initial support at 1.4836 (May 4 low) followed by 1.4704 (Apr 30 low). Initial resistance is now at 1.5373 (Jan 8 high) followed by 1.5477 (38.2% retrace 1.3503-1.8669).
·Australian Dollar – 0.7565
Initial support at 0.7337 (May 6 low) followed by the 0.7233 (Apr 30 low). Initial resistance is now at 0.7738 (Oct 6 high) followed by 0.8097 (Sept 30 high).
·Gold – 910
Initial support at 895 (May 6 low) followed by 878 (Apr 21 low). Initial resistance is now at 933 (Apr 1 high) followed by 945 (Mar 26 high).
