Greece Bailout in Focus
Last week’s currency trading review
The Dollar was mixed gaining against its two largest pairs in the Yen and the Euro but struggling to maintain against risk currencies as Stocks rallied for the 8th week. Weekly Jobless Claims improved to 456k vs. 480k previously. Also strong, US existing home sales climbing to 5.35m vs. 5.01mn previously and New Homes Sales jumping to 411k vs. 324k previously. The Euro was sold aggressively throughout the week as traders pushed the Greece issue to breaking point and finally late on Friday received word that Greece was activating the EU/IMF Aid package. The Euro had traded as low as 1.3200 as the market fretted about contagion from other Eurozone countries needing bailouts as yields on government bonds spiked higher. The Activation of Aid on Friday allowed a solid bounce but the market is wary and any issues that derail the implementation of Aid would result in heavy selling. The EUR/USD lost -0.93% closing at 1.3376, after opening the week at 1.3501.
The Japanese Yen weakened aggressively as risk aversion caused from the Goldman Sach fraud shock subsided and stock markets continued to react to positive quarterly earning and US data. EUR/JPY underperformed due to the Greece saga but AUD/JPY and USD/JPY closed near monthly highs. The USD/JPY gained +1.91% closing at 93.96, after opening at 92.17 previously. The GBP was able to end slightly higher but was also struggling to capitalize on the ‘risk on’ environment as polls suggested that the UK elections might end in a hung parliament. Q1 GDP did little to inspire Pound buying coming at a mild 0.2% vs. 0.4% previously. GBP/USD gained +0.09% closing at 1.5375 after opening at 1.5361. The AUD was buoyed by the RBA April Meeting minutes which justified the Interest Rate hike by reference to the mining boom and possible associated inflation risks. The hawkish overtone was countered however on Friday by RBA Governor Stevens comment that rates are ‘ close to average’ and future hikes are an open question. The AUD/USD gained +0.37% closing at 0.9277 after opening at 0.9243.
The forex trading week preview
In the States On Tuesday, April Consumer Confidence is forecast at 53.6 vs. 52.5 previously. Also, Fed Chief Bernanke Speaks. On Wednesday, FOMC Rate Decision is forecast unchanged at 0.25% although attention will be on the accompanying statement fore any change in wording. On Thursday, Weekly Jobless Claims are forecast at 445k vs. 456k previously. On Friday, Q1 GDP is forecast at 3.5% vs. 5.6% previously. Also released, April UoM forecast at 71.0 vs. 69.5. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Monday, ECB President Trichet Speaks. On Wednesday, April German CPI is forecast at 1.2% vs. 1.1% previously y/y. On Thursday, German April Unemployment Rate is forecast unchanged at 8.0%, On Friday, April CPI is forecast at 1.5% vs. 1.5% previously y/y. In the UK On Thursday, GFK Consumer Confidence is forecast at -15 vs. -15 previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Thursday, March Industrial Production is forecast at 31.10% vs. 31.30% y/y. On Friday, BOJ Rate Announcement forecast unchanged at 0.1%. In Australia On Wednesday, Q1 CPI is forecast at 0.8% vs. 0.5% previously q/q. Also, RBNZ Rate announcement forecast at 2.5% vs. 2.5% previously. On Friday, March Private Sector Credit is forecast at 1.9% vs. 1.6% previously y/y. 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 |
1.2965 |
1.3121 |
1.3380 |
1.3422 |
1.3692 |
|
USD/JPY |
91.60 |
92.74 |
94.20 |
94.32 |
94.79 |
|
GBP/USD |
1.5044 |
1.5130 |
1.5425 |
1.5522 |
1.5688 |
|
AUD/USD |
0.9035 |
0.9131 |
0.9275 |
0.9364 |
0.9406 |
|
XAU/USD |
1122.00 |
1123 |
1158.00 |
1164 |
1183.00 |
|
OIL/USD |
82.50 |
85 |
85.40 |
86 |
88.00 |
Euro – 1.3380
Initial support at 1.3121 (Apr 29 2009 low) followed by 1.2965 (Apr 28 2009 low). Initial resistance is now located at 1.3422 (Apr 22 high) followed by 1.3692 (Apr 12 high)
Yen – 94.20
Initial support is located at 92.74 (Apr 22 low) followed by 91.60 (Apr 19 low). Initial resistance is now at 94.32 (Apr 23 high) followed by 94.79 (Aug 5 High).
Pound – 1.5425
Initial support at 1.5130 (Apr 6 low) followed by 1.5044 (Mar 31 low). Initial resistance is now at 1.5522 (Apr 15 low) followed by 1.5688 (Feb 18 low).
Australian Dollar – 0.9275
Initial support at 0.9131 (Mar 31 low) followed by the 0.9035 (Mar 29 low). Initial resistance is now at 0.9364 (Apr 15 high) followed by 0.9406 (Nov 16 high).
Gold – 1158
Initial support at 1123 (Apr 19 low) followed by 1122 (Apr 7 low). Initial resistance is now at 1164 (April 12 high) followed by 1183 (0.764 of 1126.56-1044.85).
Oil – 85.40
Initial support at 85.00 (Intraday Support) followed by 82.50 (Intraday Support). Initial resistance is now at 86.00 (March high) followed by 88.00 (Intraday Resistance).
