U.S. Dollar Trading (US) despite no reversal in stock markets the USD came under heavy selling pressure on a combination of negative news and weak US data. Moody’s warned that the US could be put on negative review if the debt ceiling issue is not resolved. Weekly Jobless claims at 422k vs. 415k forecast. In US stocks, DJIA -41 points closing at 12248, S&P -1 points closing at 1313 and NASDAQ +4 points closing at 2773. Looking ahead, May NFP forecast at 150k vs. 244k previously. The Unemployment Rate forecast at 8.9% vs. 9% previously. May ISM Services forecast at 54 vs. 52.8 previously.

The Euro (EUR) was the strongest currency in the market able to rebound to fresh multi week highs on talk a Greece solution was close. This combined with the US Debt rating news to help the EUR/USD break above 1.4500. ECB President Trichet spoke overnight about the possibility of a single EU Finance Ministry. Overall the EUR/USD traded with a low of 1.4323 and a high of 1.4515 before closing the day around 1.4500 in the New York session. Looking ahead, May EU PMI Services forecast unchanged at 55.4.

The Japanese Yen (JPY) USD/JPY fell below Y81 on the back of weakness in the Dollar but Yen crosses followed EUR/JPY higher. AUD/JPY found solid support below Y86 before creeping back towards Y86.5 resistance. Overall the USD/JPY traded with a low of 80.55 and a high of 81.35 before closing the day around 80.85 in the New York session.

The Sterling (GBP) did well against the USD but the EUR/GBP went to fresh highs above 0.8855 as the market remained concerned about the UK economy and Greece fears subsided. The outlook for Cable is mixed with gains hard to maintain and sellers ready to pounce on any bad data. Overall the GBP/USD traded with a low of 1.6303 and a high of 1.6420 before closing the day at 1.6360 in the New York session. Looking ahead, May PMI Services forecast at 54.1 vs. 54.3 previously.

The Australian Dollar (AUD) tracked the Euro in a bounce higher helped by strong local economic data. April Retail Sales surged 1.1% vs. 0.4% previously. Commodities were mixed and the next big mover will be US jobs data tonight. Overall the AUD/USD traded with a low of 1.0585 and a high of 1.0690 before closing the day at 1.0680 in the New York session.

Oil & Gold (XAU) was volatile falling sharply over $ 20 an ounce before recovering most of the losses late in the day. Overall trading with a low of USD$ 1519 and high of USD $ 1544 before ending the New York session at USD$ 1535 an ounce. Oil was unchanged on the day with stocks quiet and the key $ 100 close. WTI Oil Closed -2.40 at $ 100.29 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4125

1.4257

1.4480

1.4500

1.4569

USD/JPY

80.34

80.64

80.75

82.00

82.23

GBP/USD

1.6132

1.6268

1.6345

1.6496

1.6661

AUD/USD

1.0510

1.0609

1.0680

1.0758

1.0877

XAU/USD

1504.00

1518

1532

1550

1577

OIL/USD

98.00

100.00

100.60

103.00

105.00

Euro – 1.4480

Initial support at 1.4257 (May 30 low) followed by 1.4125 (May 27 low). Initial resistance is now located at 1.4500 (Big Figure) followed by 1.4569 (61.8% retrace of 1.4940-1.3970)

Yen – 80.75

Initial support is located at 80.64 (May 16 low) followed by 80.34 (May 13 low). Initial resistance is now at 82.00 (Big Figure resistance) followed by 82.23 (May 19 high).

Pound – 1.6345

Initial support at 1.6268 (May 26 low) followed by 1.6132 (May 25 low). Initial resistance is now at 1.6496 (Jun  high) followed by 1.6547 (May 31 high).

Australian Dollar – 1.0680

Initial support at 1.0609 (May 27 low) followed by the 1.0510 (May 26 low). Initial resistance is now at 1.0758 (May 31 high) followed by 1.0877 (76.4% retrace of 1.1012-1.0441).

Gold – 1532

Initial support at 1518 (May 27 low) followed by 1504 (May 23 low). Initial resistance is now at 1550 (June 1 high) followed by 1577 (All time high).

Oil – 100.60

Initial support at 100.00 (Intraday Support) followed by 98.00 (Intraday Support). Initial resistance is now at 103.00 (Intraday resistance) followed by 105.00 (Intraday Resistance).

Written by Anthony Darvall

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