Weekly Summary – 6th September 2010
Market’s Rally as Recovery Hopes Grow
Last week’s currency trading review
The Dollar a big data week saw important figures come in positive and allowed a major rally in US stock markets. The positive environment encouraged investors to sell Dollars for higher risk assets and currencies. August ISM Manufacturing came in at 56.3 vs. 53.2 forecast and August Non Farm Payrolls beat expectations at -54k vs. -100k forecast. The Euro had a good week building on previous momentum to take another leg higher. The highlight of the week was the ECB announcement where although they held at 1.0%, the supporting commentary was very positive. German July Retail Sales fell -0.3% vs. 0.6% forecast. EUR/GBP was buoyant as the Pound underperformed. The EUR/USD gained +1.04% closing at 1.2895, after opening the week at 1.2761.
The Japanese Yen the market tried to rally in the USD/JPY but each attempt was sold off with the market disappointed that the BOJ’s emergency meeting failed to address the Yen strength. Friday ‘s US jobs figures allowed another test of Y85 but this was quickly repelled. GBP/JPY tested fresh monthly lows under Y129 before rebounding. The USD/JPY fell -1.09% closing at 84.28 vs. 85.20 previously. The GBP sentiment towards the Pound has turned very cautious with economic data weaker than expected. Manufacturing PMI dropped to 54.3 from 56.9 and Services PMI slipped to 51.3 vs. 53.1 previously. The GBP/USD fell -0.49% closing at 1.5450 after opening at 1.5526. The AUD was buoyed higher on the stronger risk environment and great economic data. July Retail Sales were at 0.7% vs. 0.4% m/m previously. Q2 GDP also beat expectations at 1.2% vs. 0.9% forecast Q/Q. 0.9000 provided little resistance on Monday and 0.9180 was tested by Friday. The AUD/USD gained +1.92% closing at 0.9164 after opening at 0.8988.
The Forex Trading Week Preview
In the States On Wednesday, July Consumer Credit forecast at 5.4bn vs. -1.3bn previously. Weekly Jobless Claims forecast at 470k vs. 472k previously. Also released, July Trade Balance -47.8bn vs. -49.9bn previously. On Friday, Canadian August Employment Change is forecast at 22.8k vs. -9.3k previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Tuesday, German July Forecast at 0.6% vs. 3.2% previously m/m. On Wednesday, German July Trade Balance forecast at 13.0bn vs. 14.1bn previously. On Friday, German August Final forecast 1.0% y/y. In the UK, On Wednesday Industrial Production forecast at 0.4% vs. -0.5%.On Thursday, BOE Rate Annoucement forecast to hold at 0.5%. Also released July Trade Balance is forecast at -7.6bn vs. -7.4bn previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Tuesday, BOJ Rate Announcement is forecast at 0.1% with no change from last week’s emergency meeting. In Australia On Tuesday, RBA Rate Announcement is forecast to remain at 4.5%. On Thursday, August Unemployment is forecast at 5.2% vs. 5.3% previously with an Employment change 25k vs. 23.5k.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 |
1.2434 |
1.2588 |
1.2885 |
1.2933 |
1.3000 |
|
USD/JPY |
81.85 |
83.60 |
84.45 |
85.23 |
86.38 |
|
GBP/USD |
1.5125 |
1.5324 |
1.5450 |
1.5492 |
1.5713 |
|
AUD/USD |
0.8634 |
0.8771 |
0.9145 |
0.9176 |
0.9222 |
|
XAU/USD |
1210.00 |
1232 |
1248 |
1265 |
1300.00 |
|
OIL/USD |
70.00 |
72.50 |
74.35 |
75.00 |
76.00 |
Euro – 1.2885
Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)
Yen – 84.45
Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.23 (Sept 3 high) followed by 86.36 (Aug 13 high).
Pound – 1.5450
Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5492 (Sept 1 high) followed by 1.5713 (Aug 12 high).
Australian Dollar – 0.9145
Initial support at 0.8771 (Aug 25 low) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9176 (Sept 3 high) followed by 0.9222 (Aug 6 high).
Gold – 1248
Initial support at 1232 (Aug 31 low) followed by 1210 (Aug 24 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (round number).
Oil – 74.35
Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).
