CURRENCY TRADING SUMMARY – 11th May (00:30GMT)
U.S. Dollar Trading (USD) whipped about against a number of majors as investors returned to risk following announcement of a 750 Billion Euro total support package. As European stock markets were first to benefit in gains, positivity spilled on through to US share markets with the Dow Jones gaining 404 points (+3.9%), S& P up 4.4% and the NASDAQ gaining 109 points (+4.8%). With little data out on Tuesday, much of the focus will be placed on Trade Balance and Retail Sales figures later in the week
The Euro (EUR) the EU’s commitment to allay fears in the Euro Bloc were well digested by markets, contributing to a temporary return to risk. The Reaction in Asia was pronounced with the single currency moving rapidly in a widened range. The Euro gapped higher on open as rumours had circulated Sunday evening that EU officials were close to an agreement on a plan to prevent further meltdown, with expected figure to be in the vicinity of 400bln euro. The Euro traded with a low of 1.2723 and a high of 1.3095. Little data ahead on Tuesday.
The Japanese Yen (JPY) generally lost ground across the board following the EU rescue plan. The EURJPY was hardest hit having moved from 118.27 to a high of 122.30 before paring much of its gains. The USDJPY had traded with a low of 92.70 and a high of 93.50 before closing the trade at 93.20.
The Sterling (GBP) continues to be weighed over uncertainty surrounding a hung parliament. Negotiations between the Conservatives and Liberal Democrats have continued in to a third day. Rumours are that leaders are close to an agreement, yet are awaiting the backing of their respective parties. In other news, the BoE left the official cash rate unchanged at 0.50% to no surprise whilst voting to no change in the asset purchase program. The GBPUSD traded with a low of 1.4763 and a high of 1.5056.
The Australian Dollar (AUD) took much direction from the Euro and the return in risk saw the Aussie dollar pop back above 90 cents. In domestic news Business confidence for the month of May fell from 16 to 13. The AUDUSD traded with a low of 0.8925 and a high of 0.9077.
Oil & Gold (XAU) Crude rose for the first time in Five trading days as investors were optimistic in global economic growth in light of developments across a the Euro zone. Crude rallied by $1.69 a barrel to $76.80. XAU also moved higher on Monday as commodities were key benefactors before falling US$9.60 an ounce to US$1200.80.
Euro – 1.2785
Initial support at 1.2457 (Mar 4 low) followed by 1.2330 (October 28 2008 low). Initial resistance is now located at 1.3115 (Apr 28 low) followed by 1.3214 (May 4 high)
Yen – 93.05
Initial support is located at 88.26 (May 6 low) followed by 88.14 (April 28 low). Initial resistance is now at94.19 (May 6 high) followed by 94.99 (May 5 high).
Pound – 1.4855
Initial support at 1.4477 (May 7 low) followed by 1.4398 (April 22, 2009 low). Initial resistance is now at 1.5148 (May 6 High) followed by 1.5265 (May 4 high).
Australian Dollar – 0.9025
Initial support at 0.8716 (Mar 6 low) followed by the 0.8579 (0.618 of 0.8578 – 0.9389). Initial resistance is now at 0.9275 (Mar 4 high) followed by 0.9325 (Apr 30 high).
Gold – 1202.40
Initial support at 1166 (Apr 30 low) followed by 1146 (Apr 27 low). Initial resistance is now at 1213.48 (May 7 high) followed by 1226.44 (Dec 3 high).
Oil – 77.25
Initial support at 75.56 (Intraday Support) followed by 75.00 (Intraday Support). Initial resistance is now at 80.00 (March high) followed by 82.50 (Intraday Resistance).
