BAILOUT REJECTED! MARKET CRASHS
CURRENCY TRADING SUMMARY – 30thSeptember 2008 (00:30GMT)
·U.S. Dollar Trading (USD) in a massive shock to the markets the US Congress rejected the Bailout plan. Stocks crash around the world with Dow Jones dropping a record 700 points. The Fed responded by increasing swap lines to $620 Billion with other central banks. The dollar was immediately sold off but regained as markets freezed up and USD demand surged on safe haven flows. Core PCE Price Index up 0.2% at expectations. In the U.S. share markets, the NASDAQ was down 199 points (-9.14%) and the Dow Jones was down 777 points (-6.98%). Crude Oil closed down $10.52 ending the New York session at $96.37 per barrel. Looking ahead, Chicago PMI is seen down at 53.5 from 57.9 and CB consumer confidence is seen lower at 54.6 from 56.9.
·The Euro (EUR) traded significantly lower as a large European bank was bailed out. The Euro did receive a short term bounce as the US bailout was rejected. Huge USD repatriation flows were seen. Overall the EUR/USD traded with a low of 1.4303 and a high of 1.4635 before closing the day at 1.4400 in the New York session. Looking ahead, Eurozone Inflation is seen lower at 3.6% in September vs. 3.8% in August.
·The Japanese Yen (JPY) surged higher as markets crashed around the world. Reports of over 1 trillion was lost in worlds markets and JPY repatriation outpaced even the USD. Japanese August Retail sales were +0.7%. Overall the USDJPY traded with a low of 105.03 and a high of 106.57 before closing the day around 106.05 in the New York session. Update Japanese Unemployment rate for August seen at 4.1%.
·The Sterling (GBP) broke to the downside in early European trading as Bradford and Bingley was seized and sold by the regulators. After the Bailout was rejected heavy GBY/JPY selling dragged the Pound towards 1.80. Overall the GDP/USD traded with a low of 1.7960 and a high of 1.8340 before closing the day at 1.8080 in the New York session. Looking ahead, Q2 GDP is seen flat at 0.0%.
·The Australian Dollar (AUD) was sold aggressively as stock losses mounted and the Bailout plan was rejected. Waves of AUD/JPY forced the AUD for a test of 0.8000 early in Asian trading. Overall the AUD/USD traded with a low of 0.8002 and a high of 0.8349 before closing the US session at 0.8030. August Retail Sales seen at 0.2% down from 1.4% in July.
·Gold (XAU) surged higher as safe haven flows. Broke above $900 an ounce and closed above this key level. Overall trading with a low of USD$868.20 and high of USD$917 before ending the New York session at USD$906 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4258 |
1.4302 |
1.4375 |
1.4636 |
1.4679 |
|
USD/JPY |
103.54 |
104.02 |
104.35 |
107.02 |
107.47 |
|
GBP/USD |
1.7787 |
1.7917 |
1.8035 |
1.8468 |
1.8669 |
|
AUD/USD |
0.7676 |
0.7802 |
0.7995 |
0.8380 |
0.8469 |
|
XAU/USD |
825.12 |
865.40 |
906.00 |
924.75 |
935.33 |
·Euro – 1.4375
Initial support at 1.4302 (Sept 29 low) followed by 1.4258 (61.8% retrace 1.3882 to 1.4867). Initial resistance is now located at 1.4636 (Sept 29 high) at followed by 1.4679 (Sept 26 high).
·Yen – 104.35
Initial support is located at 104.02 (Sept 2 low) followed by 103.54 (Sept 16 low). Initial resistance is now at 107.02 (Sep 25 high) followed by 107.47 (Sept 22 high).
·Pound – 1.8035
Initial support at 1.7917 (Sept 19 low) followed by 1.7787 (Sep 17 low). Initial resistance is now at 1.8468 (Sep 26 high) followed by 1.8669 (Sep 25 High).
·Australian Dollar – 0.7995
Initial support at 0.7802 (Sept 17 low) followed by the 0.7676 (Aug 17 2007 low). Initial resistance is now at 0.8380 (Sept 26 high) followed by 0.8469 (Sept 23 high).
·Gold – 906
Initial support at 865.4 (Sept 25 low) followed by 825.12 (Sept 19 low). Initial resistance is now at 924.75 (Sep 29 high) followed by 935 (July 25 high).
