CURRENCY TRADING SUMMARY –20JULY06 (05:00GMT)
- U.S. Dollar Trading (USD) fell against the major currencies in the overnight foreign exchange trading session as US CPI came in on expectations and US Federal Reserve Chairman Bernanke signaled a pause in rate hikes may be near. US Consumer prices rose by 0.2pct in June which was in line with market forecasts. The core CPI rose by 0.3pct compared with the 0.2% estimated by the markets. Federal Reserve Chairman Ben Bernanke highlighted slowing growth will help to limit inflation pressures over time in his semi-annual speech to congress. In a presentation considered slightly dovish by markets, Bernanke highlighted that some inflation risks do remain, however previous policy actions have not come into effect yet because of lagging. In other markets, the Dow Jones index strengthened by 212pts and the NASDAQ lifted 37pts as the market reacted positively to Bernanke hinting at a possible pause in the rate hiking cycle. Crude oil fell by US88c a barrel to US$72.66 in response to a rise in crude inventories last week in the
US US
- The Euro (EUR) traded within a low of 1.2458 and a high of 1.2609, before closing at 1.2586 in the
New York
- The Japanese Yen (JPY) traded within a low of 116.66 and a high of 117.87 versus the dollar, before closing at 116.88 in the
New York
- The Sterling (GBP) traded within a low of 1.8230 and a high of 1.8440, before closing at 1.8423 in the
New York UK
- The Australian Dollar (AUD) traded within a low of 0.7404 and a high of 0.7510, before closing at 0.7510 in the
New York - Gold (XAU) lifted by US$13.30 to US$642.80 an ounce as a response to a weaker USD.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.2403 | 1.2456 | 1.2605 | 1.2612 | 1.2658 |
| USD/JPY | 116.15 | 116.64 | 116.85 | 117.96 | 118.48 |
| GBP/USD | 1.8176 | 1.8220 | 1.8430 | 1.8442 | 1.8482 |
| AUD/USD | 0.7383 | 0.7399 | 0.7500 | 0.7513 | 0.7539 |
| XAU/USD | 594.25 | 617.90 | 644.00 | 654.50 | 676.35 |
- Euro 1.2605
Initial support at 1.2456 (Jul 19 corrective low) followed by 1.2403 (50% retracement of the 1.1825 to 1.2890 advance). Initial resistance is now located at 1.2612 (32.8% retracement of the 1.2865 to 1.2456 decline) followed by 1.2658 (Jul 17 high).
- Yen 116.85
Initial support is located at 116.64 (July 19 low) followed by 116.15 (Jul 17 low). Initial resistance is now at 117.96 (Apr 19 high) followed by 118.48 (76.4% of 121.41 to 108.98 big decline).
- Pound – 1.8430
Initial support at 1.8222 (Jul 19 corrective low) followed by 1.8176 (Jul 17 reaction low). Initial resistance is now at 1.8442 (July 19 high) followed by 1.8482 (July 12 high).
- Australian Dollar – 0.7500
Initial support at 0.7399 (Jul 5 corrective low) followed by 0.7383 (61.8% retracement of the 0.7269 to 0.7568 rally). Initial resistance is now at 0.7513 (July 19 high) followed by 0.7539 (Jul 17 high).
- Gold – 644
Initial support at 617.9 (Jul 19 low) followed by 594.25 (61.8% retracement of the 543.50 to 676.35 advance). Initial resistance is now at 654.5 (Jul 18 corrective high) followed by 676.35 (Jul 17 reaction high).
