Weekly Summary – 23rd August 2010
US Jobs Darkening Outlook
Last week’s currency trading review
The Dollar continued to remain strong in the risk off environment with a relief rally failing when weekly jobless claims confirmed the US jobs situation was deteriorating. Weekly Jobless Claims increased to 500k vs. 488k previously for the highest reading this year. Adding to the downside pressure on markets was the large drop in the Philly Fed Manufacturing index at -7 vs. +7 forecast. The Euro came under heavy selling pressure on Friday as ECB member Weber expressed his view that the ECB should extend support for banks at least until the end year. EUR/JPY is sitting under Y100 and could threaten multiyear lows under Y107. The August German ZEW economic sentiment showed an unexpected drop to 14 vs. 20 forecast.The EUR/USD fell -0.33% closing at 1.2711, after opening the week at 1.2753.
The Japanese Yen started to strengthen from the open keeping Y85 pressured all week with only daily jawboning and rumors of government intervention helping to stem gains. Q2 GDP came in much weaker than expected at 0.1% vs. 0.6% forecast. The USD/JPY fell -0.68% closing at 85.64 vs. 86.19 previously. The GBP was able to rally on the MPC minutes which showed the BOE member sentence voted for a rate hike once again but finished near 1.5500 supports on general risk aversion. Not all economic data has been bad with July Retail Sales at +1.1% vs. +0.4% forecast m/m. The GBP/USD fell -0.39% closing at 1.5531 after opening at 1.5592. The AUD hit fresh month lows on Friday before rallying into the weekend to end slightly higher on the week. The market outlook is mixed with political uncertainty and weak investor sentiment at odds with strong Aussie economic fundamentals. The AUD/USD gained +0.11% closing at 0.8937 after opening at 0.8927.
The Forex Trading Week Preview
In the States On Tuesday, July Existing Home sales are forecast at -14.30%vs. 5.10% previously. On Wednesday, July Durable Good Orders forecast at 3.0% vs. -1.2% previously. Also released, July New Home Sales are forecast 0.0% vs. 23.60% previously m/m. On Thursday, Weekly Jobless Claims are forecast at 493k vs. 500k. On Friday, Q2 GDP forecast at 1.4% vs. 2.4% previously. Also released, August UoM Consumer Confidence forecast at 69.6. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Monday, German Manufacturing PMI is forecast at 60.9 vs. 61.2 previously. On Tuesday, German GDP seen at 2.2% Q/Q. On Wednesday, August IFO Business Climate forecast at 105.5 vs. 106.2 previously. On Friday, German CPI is forecast at 1.1% vs. 1.2% previously y/y. In the UK, On Thursday, Q2 GDP is expected to remain at 1.1% Q/Q. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Friday, July CPI is forecast at -0.9% vs. -0.7% previously. In Australia On Thursday, Q2 Capex forecast at 2.3% vs. -0.2% previously.We will provide our previews and reviews of these data releases in the daily summary.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2523 |
1.2604 |
1.2695 |
1.2933 |
1.3334 |
|
USD/JPY |
83.50 |
84.73 |
85.55 |
86.38 |
88.12 |
|
GBP/USD |
1.5125 |
1.5499 |
1.5540 |
1.5713 |
1.5999 |
|
AUD/USD |
0.8634 |
0.8781 |
0.8885 |
0.9080 |
0.9222 |
|
XAU/USD |
1190.00 |
1210 |
1227 |
1244 |
1265.00 |
|
OIL/USD |
71.00 |
72.50 |
74.20 |
75 |
77.00 |
Euro – 1.2695
Initial support at 1.2604 (61.8% retrace of 1.2152-1.3334) followed by 1.2523 (July 13 low). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3334 (August 6 high)
Yen – 85.55
Initial support is located at 84.73 (August 11 low) followed by 83.50 (June 1995 low). Initial resistance is now at 86.38 (August 13 high) followed by 88.12 (July 28 high).
Pound – 1.5540
Initial support at 1.5499 (Aug 18 low) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5713 (August 12 high) followed by 1.5999 (Aug 6 high).
Australian Dollar – 0.8885
Initial support at 0.8781 (38.2% retrace of 0.8067-0.9222) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9080 (August 17 high) followed by 0.9222 (Aug 6 high).
Gold – 1227
Initial support at 1210 (Aug 13 low) followed by 1190 (Aug 10 low). Initial resistance is now at 1244 (July 1 high) followed by 1265 (June 21 high).
Oil – 74.20
Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 77.00 (Intraday Resistance).
