Market weakness starting to reemerge
CURRENCY TRADING SUMMARY – 18th May (00:30GMT)
U.S. Dollar Trading (USD) received support from the changing mood in the markets with last week being the first in 2 months to show significant Equity downside. Currencies took their cue and dropped against the safe haven USD quite significantly. JPY continued to strengthen outpacing the dollar. CPI (Apr) remained flat vs. 0.2% previously. Consumer Confidence (May) jumped to 67.9 vs. 65.1 previously. Crude Oil was down $2.28 a barrel to close at 56.34. In US share markets, the Nasdaq was down 9 points or -0.54% and the Dow Jones was down 62 points or -0.75%. Looking ahead, NAHB Housing Market Index forecast at 15 vs. 14 previously.
The Euro (EUR) fell heavily from highs at the start of the US session above 1.3600. Support at 1.3500 broke and the pair looks on its way to the 200 day moving average at 1.3420. German GDP rocked the Euro with a Q1 drop of -3.8% vs. -3.0% forecast. EU GDP came out at a milder -2.5% in Q1. Overall the EUR/USD traded with a low of 1.3461 and a high of .1.3650 before closing at 1.3479. Looking ahead, Buba President Weber Speaks.
The Japanese Yen (JPY) continued pressure on the USD/JPY encouraged the crosses to push for new weekly lows on Friday. Support at 95 and just below was tested into the weeks close and held although not comfortably. The seemingly relentless drop after failing at 100 is putting the Yen weakness theory into doubt. Overall the USDJPY traded with a low of 94.74 and a high of 96.08 before closing the day around 95.06 in the New York session. Looking ahead, Consumer Confidence previously at 28.4%.
The Sterling (GBP) fell to the resurgent USD but managed to hold up relatively well against other currencies. EUR/GBP and GBP/AUD managed to make small but solid gains. Ongoing weakness against the USD is not the preferred option but flows in the Euro will dominant direction. Overall the GBP/USD traded with a low of 1.5131 and a high of 1.5288 before closing the day at 1.5163 in the New York session.
The Australian Dollar (AUD) responded to the change in mood dropping against its will to test 0.7500 and 0.7480. The largest leg of support that was removed last week was the AUD/JPY which dropped over 6%. AUD/NZD a favorite cross of the two antipodeans appers to be capping out above 1.2800. Overall the AUD/USD traded with a low of 0.7476 and a high of 0.7608 before closing the US session at 0.7486. Looking ahead, RBA Governor Stevens Speaks about Australia and Canada.
Gold (XAU) continued to grind higher feeding offtheresurgence in fear. Resistance at $930 gave way and resistance at $950 beckons.Overall trading with a low of USD$924 and high of USD$934 before ending the New York session at USD$931 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3247 |
1.3343 |
1.3430 |
1.3739 |
1.3799 |
|
USD/JPY |
93.54 |
94.15 |
94.75 |
96.69 |
97.84 |
|
GBP/USD |
1.4944 |
1.5061 |
1.5135 |
1.5373 |
1.5477 |
|
AUD/USD |
0.7337 |
0.7459 |
0.7470 |
0.7738 |
0.8097 |
|
XAU/USD |
895.00 |
906.00 |
930.00 |
934.20 |
945.00 |
Euro – 1.3430
Initial support at 1.3343 (May 8 low) followed by 1.3247 (May 6 low). Initial resistance is now located at 1.3739 (March 19 high) followed by 1.3799 (Jan 8 high)
Yen – 94.75
Initial support is located at 94.15 (May 20 low) followed by 93.54 (Mar 19 low). Initial resistance is now at 96.69 (May 12 high) followed by 97.84 (May 11 high).
Pound – 1.5135
Initial support at 1.5061 (May 7 low) followed by 1.4944 (May 4 low). Initial resistance is now at 1.5373 (Jan 8 high) followed by 1.5477 (38.2% retrace 1.3503-1.8669).
Australian Dollar – 0.7470
Initial support at 0.7459 (May 7 low) followed by the 0.7337 (May 6 low). Initial resistance is now at 0.7738 (Oct 6 high) followed by 0.8097 (Sept 30 high).
Gold – 930
Initial support at 906 (May 8 low) followed by 895 (May 6 low). Initial resistance is now at 934.2 (May 15 high) followed by 945 (Mar 26 high).
