CURRENCY TRADING SUMMARY – 12th May (00:30GMT)
U.S. Dollar Trading (USD) the market saw a continuation in positive sentiment overnight, before falling off later in the New York session, the USD failed to gather any clear direction against a number of majors. With little data scheduled, US wholesale inventories rose by 0.4%, slightly shy of the 0.5% forecasted. In US share markets the Dow Jones fell 37 points, the S& P fell 0.3%. In key data released on Wednesday, focus shifts to Trade Balance for the month of March is expecting to show a deficit of -40 billion, slightly worse than the previous -39.7 billion.
The Euro (EUR) failed to maintain its early week revival as the finer details of the EU rescue package continue to be a point of concern amongst investors. Euro share markets also fell on Tuesday as investors looked to cover long positions from the previous session rally. The EURUSD traded in a tightened range with a low of 1.2670 and a high of 1.2740. German GDP heads key figures tonight, whilst industrial production will also require attention.
The Japanese Yen (JPY) took direction from developments amongst other markets and crosses, to trade in a range of 92.21 and 93.15. Little data ahead out of Japans until Thursday release of Current account. In other news Japan Finance Minister was quoted as saying that Japan may need a similar Austerity package to that of the IMF/EU, as the economy continues to battle deflation.
The Sterling (GBP) remained under pressure as concerns were raised that the new government would not be able to revitalize the UK economy. The GBPUSD had gained initially after reports that talks between the Labour party and Liberal Democrats had fallen short, opening the door for a new Conservative/Liberal coalition and prompting Prime Minister Gordon Brown’s resignation. The GBPUSD traded with a high of 1.5006 before pairing much of its gains to trade as low as 1.4916.
The Australian Dollar (AUD) was also subject to other currencies trading with little direction. Business confidence in May fell from 16 to 13, yet had a muted reaction on the currency. In other news the 2010 budget deficit is seen at $40.8 billion against the forecasted deficit of $57.1 billion in 2009. AUDUSD traded with a low of 0.8930 and a high of 0.9020
Oil & Gold (XAU) XAU was the biggest news overnight trading at an all time high of $1234.50 as investors sought the precious metal as safe haven. Crude Oil fell by US$0.43 to US$76.37 on the back of profit taking.
Euro – 1.2640
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 – 92.75
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 – 1.4895
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 – 0.8940
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 – 1227.65
Initial support at 1166 (Apr 30 low) followed by 1146 (Apr 27 low). Initial resistance is now at 1234.50 (May 11 high, Record High) followed by 1250 (Psychological Round number).
Oil – 75.80
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).
