FOMC Upgrades View, Stocks Dip
CURRENCY TRADING SUMMARY – 24th September (00:30GMT)
U.S. Dollar Trading (USD) was extremely volatile inline with most FOMC trading days. The market initially sold USD after the announcement on the comment that interest rates would be kept low for an extended period of time. The sharp reversal in the last hour of trade on US stocks sent the Dollar surging higher. Commodities crashed led by Oil down over 3%. Crude Oil was down $2.79 closing at $68.97. In US Stocks, DJIA -81 points closing at 9748, S& P -10 points closing at 1060 and NASDAQ -14 points closing at 2131. Looking ahead, Weekly Jobless Claims forecast at 550k vs. 545k.
The Euro (EUR) tested 1.4850 twice before falling most in September on the back of sharp Equity losses. Eurozone Data was solid with September Manufacturing PMI at 49 vs. 48.2 previously and Services PMI at 50.6 vs. 49.9 previously. July EU Industrial Orders grew 2.6% vs. 2.0% forecast. Overall the EUR/USD traded with a low of 1.4686 and a high of 1.4845 before closing at 1.4750. Looking ahead, September IFO forecast at 90.0 vs. 90.5 previously.
The Japanese Yen (JPY) was generally weak across the board until risk aversion spiked in the last hour of US Trade. Resistance at 91.60 was tested but held firm. Big levels on Crosses also seem to be containing price action with 135, 150 and 80 on the EUR/JPY, GBP/JPY and AUD/JPY respectively capping recent rallies. Overall the USDJPY traded with a low of 90.68 and a high of 91.64 before closing the day around 91.20 in the New York session. UPDATE August Trade Balance at 185bn vs. 170bn Forecast.
The Sterling (GBP) found some solid support across the board as the MPC meeting minutes showed 9-0 votes to keep at current levels of QE and no mention of deposit rate adjustments. EUR/GBP traded below 0.9000 but could not hold the level into the close as weakness in US Financial’s weighed down on the Pound heavily. Overall the GBP/USD traded with a low of 1.6317 and a high of 1.6468 before closing the day at 1.6350 in the New York session.
The Australian Dollar (AUD) traded at fresh year high just under 0.8800 twice before falling sharply with Stocks and commodities. 0.88 remains the bulls target which may open the door to the Key psychological 90 level. AUD/JPY traded briefly above 80 Yen but was once again unable to break the key level. Continued strength in the NZD is weighing the AUD/NZD down towards the Key 1.2000 level. Overall the AUD/USD traded with a low of 0.8649 and a high of 0.8789 before closing the US session at 0.8670.
Gold (XAU) fell with other commodities but held above $1000 an ounce level comfortably. Overall trading with a low of USD$1006 and high of USD$1018 before ending the New York session at USD$1008 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4516 |
1.4611 |
1.4715 |
1.4866 |
1.4908 |
|
USD/JPY |
90.00 |
90.13 |
91.50 |
92.53 |
93.30 |
|
GBP/USD |
1.6111 |
1.6135 |
1.6335 |
1.6568 |
1.6742 |
|
AUD/USD |
0.8529 |
0.8591 |
0.8670 |
0.8814 |
0.8943 |
|
XAU/USD |
982.00 |
995.00 |
1008.00 |
1024.00 |
1032.00 |
Euro – 1.4715
Initial support at 1.4611 (Sept 21 low) followed by 1.4516 (Sept 14 low). Initial resistance is now located at 1.4866 (Sept 22 08 high) followed by 1.4908 (Aug 22 2008 high)
Yen – 91.50
Initial support is located at 90.13 (Sept 16 low) followed by 90.00 (Sept 16 low). Initial resistance is now at 92.53 (Sept 21 high) followed by 93.3 (Sept 7 high).
Pound – 1.6335
Initial support at 1.6135 (Sept 21 low) followed by 1.6114 (Sept 1 low). Initial resistance is now at 1.6568 (Sept 17 high) followed by 1.6742 (Sept 11 high).
Australian Dollar – 0.8670
Initial support at 0.8591 (Sept 21 low) followed by the 0.8529 (Sept 8 low). Initial resistance is now at 0.8814 (Aug 22 ‘ 08 high) followed by 0.8943 (76.4% retrace 0.9850-0.6009).
Gold – 1008
Initial support at 995 (Sept 21 low) followed by 982 (Sept 3 low). Initial resistance is now at 1024 (Sept 17 high) followed by 1032 (Mar 18 2008 high).
