Large USD Rebound on Equity correction
Last week’s currency trading review
The Dollar even a stunning 3.5% Q3 GDP could not help stock markets finish the week in positive territory as fresh banking concerns caused a spike in risk aversion. The VIX also known as the fear index climbed over 20% on Friday and commodities fell aggressively from recent highs. The Euro fell heavily from the 1.5000 levels as the sentiment turned and key levels were breached. German Unemployment Change was strong at -26k vs. 15k forecast. German Retail sales were weak though at -0.5% vs. 0.7% previously. The EUR/USD fell 1.94.% closing at 1.4721, after opening the week at 1.5007.
The Japanese Yen was extremely strong but volatile as it outpaced the USD as the safe haven of choice. NZD/JPY fell over 7% and most crosses were under extreme pressure. USD/JPY finished at the key 90 Yen level but is technically under pressure as the rally failed. The USD/JPY fell -2.15 % at 90.10 after opening the week at 92.04. The GBP bucked the trend against all except the Yen with heavy EUR/GBP selling breaking the pair below 0.9000. Cable was able to shown a small rise as the pound rallied on positive data and M& A flows. October CBI realized Sales at 8 vs. 6 forecast. GBP/USD gained 0.85% closing at 1.6444 after opening at 1.6304. The AUD was heavily sold along with the NZD as the commodity currencies took the brunt of the sell off. AUD/JPY fell over 3 Yen twice during the week. Q3 CPI was at 1.0% vs. 0.9% forecast but was not strong enough to change the consensus of a 0.25% rate rise at this week’s RBA meeting. The AUD/USD fell 2.63% at 0.8987 after opening at 0.9223.
The forex trading week preview
In the States On Monday, October ISM Manufacturing is forecast at 53 vs. 52.6 previously. Also released, pending home sales forecast at 0% vs. 6.4% previously. On Tuesday, September Factory Orders are forecast at 1.0% vs. -0.85 previously. On Wednesday, ISM non-manufacturing is forecast at 51.6 vs. 50.9 previously. Also on Wednesday, FOMC Rate announcement forecast to remain at 0.25%. On Thursday, Q3 Productivity is forecast at 6% vs. 6.6% previously. Q3 Unit labor costs are forecast at -3.8% vs. -5.9% previously. Weekly Jobless claims are forecast at 520k vs. 530k previously. On Friday, US Nonfarm Unemployment is forecast at -175k vs. -263k previously and the Unemployment Rate is forecast 9.9% vs. 9.8%. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Monday, EU PMI manufacturing is forecast at 50.7 in October while on Wednesday EU PMI Services is forecast at 52.3. On Wednesday, EU PPI forecast at -7.7% vs. -7.5%. On Thursday, ECB rate announcement forecast unchanged at 1.00%. On Friday, German September Factory Orders forecast at 1.0% vs. 1.4% previously. In the UK On Monday, PMI manufacturing is forecast at 50 vs. 49.5 previously. On Wednesday, PMI services are forecast at 55.2 vs. 55.3 previously. On Thursday, BOE meeting forecast to remain at 0.5% with a 50bn rise in QE to 225bn pounds. On Friday, G20 meeting begins in Scotland. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Thursday, BOJ minutes released while on Friday Leading indicators are forecast at 92.5 vs. 91.2 previous. In Australia On Tuesday, RBA meet and are forecast to raise rates to 3.5% vs. 3.25% previously. On Thursday, Retail Sales are forecast to rise 0.5% vs. 0.95 previously. On Friday, RBA governor Stevens gives a speech and September’s trade balance is forecast at -2150mn vs. -1524mn previously. We will provide our previews and reviews of these data releases in the daily summary.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4646 |
1.4686 |
1.4730 |
1.4859 |
1.4927 |
|
USD/JPY |
89.28 |
89.93 |
90.00 |
91.82 |
92.53 |
|
GBP/USD |
1.6252 |
1.6339 |
1.6450 |
1.6604 |
1.6693 |
|
AUD/USD |
0.8866 |
0.8944 |
0.9015 |
0.9218 |
0.9329 |
|
XAU/USD |
1024.00 |
1026 |
1045.00 |
1059.00 |
1067.00 |
|
OIL/USD |
75.25 |
76.40 |
76.90 |
78.00 |
80.00 |
Euro – 1.4730
Initial support at 1.4683 (Oct 29 low) followed by 1.4646 (Oct 6 low). Initial resistance is now located at 1.4859 (Oct 29 high) followed by 1.4927 (Oct 27 high)
Yen – 90.00
Initial support is located at 89.93 (Oct 30 low) followed by 89.28 (Oct 15 low). Initial resistance is now at 91.82 (Oct 28 high) followed by 92.53 (Sept 21 high).
Pound – 1.6450
Initial support at 1.6339 (Oct 29 low) followed by 1.6252 (Oct 26 low). Initial resistance is now at 1.6604 (Oct 29 high) followed by 1.6693 (Oct 23 high).
Australian Dollar – 0.9015
Initial support at 0.8944 (Oct 29 low) followed by the 0.8866 (Oct 7 low). Initial resistance is now at 0.9218 (Oct 27 high) followed by 0.9329 (Oct 21 high).
Gold – 1045
Initial support at 1026 (Sept 29 low) followed by 1024 (Sept 17 high). Initial resistance is now at 1059 (Oct 25 high) followed by 1067 (Oct 20 high).
Oil – 76.90
Initial support at 76.40 (Intraday Support) followed by 75.22 (Intraday support). Initial resistance is now at 78.00 (previous support) followed by 80 (Major Level).
