Geithner helps Banks stocks rally
CURRENCY TRADING SUMMARY – 22nd April (00:30GMT)
- U.S. Dollar Trading (USD) gave up some of the strength gained on Monday when the Treasury Secretary Geithner testified that the vast majority of US banks have more capital than required and that the credit markets are improving.   Crude Oil closed up $0.63 ending the New York session at $46.51 per barrel. In US share markets, the Nasdaq was up 35 points or 2.22% whilst the Dow Jones was up 127 points or 1.63%. Looking ahead, Crude Oil Inventories are forecast at 2.3M vs. 5.6M previously.
- The Euro (EUR) failed to break through 1.2900 although the bounce was small and the Euro is feeling very heavy with the current uncertainty over next months ECB meeting stopping the improvement in risk appetite to translate into currency gains. EUR/JPY buying supported the pair to gain in New York to just below 128. EUR/GBP came under pressure again trading back to the low 0.88’s. German ZEW current conditions fell to -91 vs. -89 previously although future expectations improved. Overall the EUR/USD traded with a low of 1.2899 and a high of 1.2993 before closing at 1.2940.
- The Japanese Yen (JPY) tracked equity markets to weaken in the US session as risk appetite improved and banking stocks rallied. USD/JPY jumped towards 99 although sluggishness in the EUR/JPY meant gains were limited. March Trade Balance was at 11Bn vs. -5Bn Yen forecast. Overall the USDJPY traded with a low of 97.75 and a high of 98.90 before closing the day around 98.50 in the New York session.
- The Sterling (GBP) rebounded with stocks supported by EUR/GBP selling and GBP/JPY buying. A lot of data is ahead of us this week including Q1 GDP which will be critical in the pounds short term direction. CPI (Mar) came in at 2.9% y/y as expected. Overall the GBP/USD traded with a low of 1.4481 and a high of 1.4706 before closing the day at 1.4690 in the New York session. Looking ahead, March Claimant Count forecast at 120k vs. 138k previously. Also Feb ILO Unemployment rate forecast at 6.7% vs. 6.5%.
- The Australian Dollar (AUD) managed to grind higher most of the day as stocks were able to recover and AUD/JPY rallied. RBA minutes were released and noted that the scope for a small cut remains and that although demand in the short term was weak in the long term time Australian economy should be fine. Overall the AUD/USD traded with a low of 0.6975 and a high of 0.7128 before closing the US session at 0.7080. Looking ahead, CPI (March) forecast at 0.5% vs. -0.3% previously.
- Gold (XAU) gold eased as buoyant stocks took the shine off the alternative investment. Overall trading with a low of USD$879 and high of USD$895 before ending the New York session at USD$883 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
| EUR/USD |
1.2732 |
1.2833 |
1.2930 |
1.3074 |
1.3198 |
| USD/JPY |
97.23 |
97.66 |
98.50 |
99.76 |
100.43 |
| GBP/USD |
1.4241 |
1.4450 |
1.4660 |
1.4817 |
1.4942 |
| AUD/USD |
0.6771 |
0.6857 |
0.7075 |
0.7249 |
0.7327 |
| XAU/USD |
852.00 |
864.00 |
882.00 |
895.00 |
909.00 |
- Euro – 1.2930
Initial support at 1.2833 (March 16 low) followed by 1.2732 (Mar 12 low). Initial resistance is now located at 1.3074 (April 20 high) at followed by 1.3198 (Apr 17 high) - Yen – 98.50
Initial support is located at 97.66 (Apr 17 high) followed by 97.23 (Mar 31 low). Initial resistance is now at 99.76 (Apr 17 high) followed by 100.43 (Apr 14 high) - Pound – 1.4660
Initial support at 1.4450 (Apr 2 low) followed by 1.4241 (Mar 31 low). Initial resistance is now at 1.4817 (Apr 20 high) followed by 1.4942 (Apr 17 high). - Australian Dollar – 0.7075
Initial support at 0.6857 (Apr 1) followed by the 0.6771 (Mar 30 low). Initial resistance is now at 0.7249 (Apr 20 low) followed by 0.7327 (Apr 13 high). - Gold – 882
Initial support at 864 (Apr 17 low) followed by 852 (Jan 23 low). Initial resistance is now at 895 (Apr 21 high) followed by 909 (Apr 3 high).
