Japanese Government Change, Yen Strong
CURRENCY TRADING SUMMARY – 31st August (00:30GMT)
U.S. Dollar Trading (USD) managed small gains into the weekend although lost more ground against the Yen as traders bet correctly on a change of government. Data was mixed with improvement in UoM Consumer Confidence at 65.7 vs. 64.5 forecast, offset by weak Personal Spending and Income Growth. Crude Oil Closed up $0.25 at $72.74. In US share markets, S& P ended -2 points (-0.2%) at 1030, NASDAQ ended +1 points (0.05%) at 2028 and DOW JONES ended -36 points (-0.38%) at 9544. Looking ahead, August Chicago PMI forecast at 47 vs. 43.4 previously.
The Euro (EUR) attempted to move higher in Europe before failing once again as presumed option selling interest capped the market and sent the pair lower to supports at 1.4300. August Business Climate improved to -2.21 vs. -2.71 previously. Overall the EUR/USD traded with a low of 1.4282 and a high of 1.4388 before closing at 1.4305. Looking ahead, August Inflation forecast at -0.3% vs. -0.7% y/y.
The Japanese Yen (JPY) was strong as traders speculated on a change of government that would be consumer friendly and lead to interest rate rises in the medium term. The DPJ did in fact win with a landslide majority and the Yen opened very strong in the Asian Session Monday. Overall the USDJPY traded with a low of 93.43 and a high of 94.07 before closing the day around 93.60 in the New York session. UPDATE July Retail Sales at -2.55 vs. -3.6% forecast y/y. Also released July Industrial output at 1.9% vs. 1.4% previously.
The Sterling (GBP) received support from a revised Q2 GDP output up from -0.8% to -0.7%. USD strength in the US session capped the rally and the downside is still in focus as the market consolidates recent falls. Recent stock market gains are failing to provide solid support and are offering better intra-day sell levels. Overall the GBP/USD traded with a low of 1.6258 and a high of 1.6380 before closing the day at 1.6282 in the New York session.
The Australian Dollar (AUD) gained to 0.8470 close to year highs as traders boosted demand before the RBA meeting on Tuesday. Resistance late in the US session pulled the pair lower but still held above 0.8400 and is bullishly poised going into the new week as long as stock markets do not turn south. Overall the AUD/USD traded with a low of 0.8377 and a high of 0.8469 before closing the US session at 0.8413. Looking ahead, RBA meeting tomorrow with focus on the statement released for keys on the timing of future rate rises.
Gold (XAU) had a bullish day testing $960 before consolidating above $950 into the weekend close. Overall trading with a low of USD$948 and high of USD$961 before ending the New York session at USD$955 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4046 |
1.4201 |
1.4300 |
1.4447 |
1.4621 |
|
USD/JPY |
92.72 |
93.10 |
93.15 |
95.29 |
96.73 |
|
GBP/USD |
1.6034 |
1.6154 |
1.6280 |
1.6444 |
1.6546 |
|
AUD/USD |
0.8126 |
0.8216 |
0.8430 |
0.8478 |
0.8519 |
|
XAU/USD |
930.00 |
939.00 |
959.00 |
971.00 |
990.00 |
Euro – 1.4300
Initial support at 1.4201 (AUG 20 low) followed by 1.4046 (AUG 17 low). Initial resistance is now located at 1.4447 (Aug 5 high) followed by 1.4621 (61.8% retrace 1.6038 – 1.2330)
Yen – 93.15
Initial support is located at 93.10 (July 22 low) followed by 92.72 (July 14 low). Initial resistance is now at 95.29 (August 18 high) followed by 96.73 (Aug 12 high).
Pound – 1.6280
Initial support at 1.6154 (Aug 27 low) followed by 1.6034 (Jul 13 low). Initial resistance is now at 1.6444 (AUG 25 high) followed by 1.6546 (AUG 24 high).
Australian Dollar – 0.8400
Initial support at 0.8216 (AUG 21 low) followed by the 0.8126 (July 29 low). Initial resistance is now at 0.8478 (Aug 14 high) followed by 0.8519 (Sept 22 high).
Gold – 955
Initial support at 939 (Aug 17 low) followed by 930 (July 29 low). Initial resistance is now at 971 (August 6 high) followed by 990 (Jun 3 high).
