Currency Updates:
U.S. Dollar Trading (USD) weak Chinese Trade Data on Friday led to risk off trading during the Asian and European Trading sessions before reversing higher in the US session on rumors China may do more to support their slowing economy. Over the Weekend no China announcements have disappointed the bulls but so far the selling has been only slight in Asian Monday. Looking ahead, No Economic Data today.
The Euro (EUR) the EUR/USD was under pressure for most of the day down to 1.2240 before staging a late session US rally. The major has been capped at 1.2300 so far in Asia and we are seen some downside pressure with weekend comments from BOE King that ‘no obvious end in sight’ for the Euro Crisis. This negativity was compounded by the Vice Chancellor of Germany comments that he was disappointed with the pace of Greek Reforms. With a light data week and many still on holidays in the Northern hemisphere range trading is expected.
The Japanese Yen (JPY) the USD/JPY is under pressure from the Yen cross selling with EUR/JPY back under Y96 during Friday trade. Strong USD/JPY support at Y78 is holding for now and we expect more range trading while markets are thin and data is scarce this week.
The Sterling (GBP) what started as a weak day for the GBP/USD with the uptrend under pressure after 1.5600 was broken in the European session turned into a bullish day by the US close. The sharp reversal from 1.5580 lows saw 1.5700 tested for the first time in the week. EUR/GBP fell for most of the day down below 0.7850 and providing another avenue of support for the Pound. Looking ahead, No Major Data today.
Australian Dollar (AUD) the AUD/USD was hit hard by the Chinese data misses but support was found at 1.0500 and we later reversed on Rumors of a weekend RRR Rate Cut from China. With nothing announced we have seen the AUD/USD slightly pressured in Asia today but it’s not moving quickly with quiet markets. UPDATE Q2 Japanese GDP at 0.3% vs. 1.2% Q/Q previously.
Oil & Gold (XAU) XAU/USD finally pushed above $1620 after stalling for most of the week at the key $1618 resistance. OIL/USD dipped to $92 on Chinese slowdown reports before reversing back above $93 on fresh Chinese Stimulus talks.
