Fresh banking concerns drop Stocks and Dollar. Oil rebounds on high demand
CURRENCY TRADING SUMMARY – 12th June 2008 (00:30GMT)
·U.S. Dollar Trading (USD) rally stalled yesterday as fresh gains in Crude Oil and more banking loss rumors sent stocks lower. The US Oil Inventory Report saw its fourth week of declines as supplies fell another 4.56million barrels. In the US and Europe, financial stocks were hit by fresh write down rumors at Lehman Brothers and Goldman Sachs. Risk aversion spiked and safe haven currencies where supported helping take the Dollar off its highs. In the US share markets, the NASDAQ was down 54 points (-2.2%) and the Dow Jones was down 205 points (1.45%). Crude Oil closed up $5 ending the New York session at $136.38 per barrel. Looking ahead we have the May US Retail Sales forecasted at 0.5% rebounding from Aprils -0.2% on the back of government stimulus checks.
·The Euro (EUR) gained as oil rallied and ECB members reiterated that a rate hike in July was possible. French CPI came in strong at 0.5% (m/m) on rising energy costs increasing from Aprils 0.3%. Overall the EUR/USD traded with a low of 1.5448 and a high of 1.5587 before closing the day at 1.5570 in the New York session. Looking ahead, the ECB’s Bulletin is released along with the Eurozone’s April Industrial Production expected to come in flat at 0.0%.
·The Japanese Yen (JPY) came off new multi month high as equities turned negative in the European session on banking concerns. 1st Quarter GDP came in stronger than expected at 1.0% vs. the markets forecast 0.9% but caused little reaction as the figure still indicates sluggish growth. Overall the USDJPY traded with a low of 106.56 and a high of 107.76 before closing the day around 106.93 in the New York session.
·The Sterling (GBP) bounced off lows in line with general USD weakness but the economic data continued to show a weakening economy. Claimant Count Change expected at 8K for May came in weaker at 9K. The Average Earning Index was expected to rise to 4.1% from 4.0% fell short at 3.8% actual. The April Trade Balance also continues to worsen falling to a-7.6Bln deficit from last months -7.1Bln. Overall the GBP/USD traded with a low of 1.9493 and a high of 1.9667 before closing the day at 1.9630 in the New York session. Looking ahead, Bank of England inflation attitudes survey is released.
·The Australian Dollar (AUD) did receive a boost from the rally in commodities but failed to reclaim the .9500 level. AUD/JPY continues to trade in its recently established 100.50-102 range. Overall the AUDUSD traded with a low of 0.9430 and a high of 0.9492 before closing the day at 0.9482 in the New York session. Looking Ahead, Australian jobs data out today with 13.5K jobs expected and no change in Unemployment rate at 4.2%. UPDATE Unemployment Change -19.7K vs. 13.5K expected Unemployment Rate jumps 4.3% vs. 4.2% expected.
·Gold (XAU) rallied from lows in step with Oil. Future direction is becoming harder to establish as conflicting forces push and pull the market. Overall trading with a low of $867.9 and high of $882 ending the New York session at $880 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.5366 |
1.5441 |
1.5555 |
1.5657 |
1.5844 |
|
USD/JPY |
104.42 |
106.24 |
106.95 |
107.76 |
108.61 |
|
GBP/USD |
1.9363 |
1.9493 |
1.9630 |
1.9683 |
1.9755 |
|
AUD/USD |
0.9392 |
0.9430 |
0.9475 |
0.9527 |
0.9648 |
|
XAU/USD |
860.50 |
865.50 |
880.00 |
909.00 |
909.85 |
·Euro – 1.5555
Initial support at 1.5441 (Jun 10 low) followed by 1.5366 (Jun 5 low). Initial resistance is now located 1.5657 (Jun 10 High) at followed by 1.5844 (Jun 9 high).
·Yen – 106.95
Initial support is located at 106.24 (June 10 low) followed by 104.42 (Jun 9 low). Initial resistance is now at 107.76 (Jun 11 high) followed by 108.61 (Feb 14 high).
·Pound – 1.9683
Initial support at 1.9493 (Jun 11 low) followed by 1.9363 (Jun 5 low). Initial resistance is now at 1.9683 (61.8% retracement of the 1.9801 to 1.9493 decline) followed by 1.9755 (Jun 10 high)
·Australian Dollar – 0.9475
Initial support at 0.9430 (61.8% retracement of the 0.9291 to 0.9655 advance) followed by 0.9392 (May 16 low). Initial resistance is now at 0.9527 (Jun 10 high) followed by 0.9648 (Jun 9 high).
·Gold – 880
Initial support at 864 (Jun 10 low) followed by 860.5 (May 14 low). Initial resistance is now at 895 (June 10 high) followed by 909 (Jun 9 high).
