GBP rallies on the back of sturdy PPI, ahead of Retail Sales and CPI figures today

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was mixed against the majors on Monday, losing ground on the majority bar the Japanese Yen. In Fiscal policy, the US Government reported a 159.3 Billion surplus in April largely boosted by Tax receipts. In U.S. share markets the NASDAQ was up by 42.97 points (+1.76%) whilst the Dow Jones was also higher by 130.43 points (+1.02%). Crude oil set another record high of US$126.40, although falling US$1.73 a barrel to end at US$124.23. Looking ahead on Tuesday, much focus surrounds that of Chairman Bernanke heading a number of speeches from the Federal Reserve. In other data, Retail Sales for the month of April is made public with forecasts surrounding that of a decline by -0.1%, previous 0.2%.

European Euro

The Euro (EURO) lifted throughout the day, well above last weeks lows as confidence in the market prompted a return to demand for the single currency. The moves may have been exaggerated as many markets remained closed for the Whit Monday holiday. In policy news, ECB member Quaden commented that interest rates were not hindering growth which only added to further demand for the Euro. Overall the EURUSD traded with a low of 1.5367 and a high of

Japanese Yen (JPY)

The Japanese Yen (JPY) lost ground against a number of currencies as rallying stocks and confidence in financial markets paved the way for investors to purchase high yielding assets funded by the Yen. Overall the USDJPY traded with a low of 102.62 and a high of 104.04 before closing the day at 103.73 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) was one of the best performing currencies overnight, rebounding from three month lows against the dollar as UK Producer prices caused traders to trim bets that the BoE would look to cut rates in their next meeting. The April figures for PPI revealed that input prices jumped by 2.4%, whilst output prices also rose by 1.4%, with analyst suggesting the underlying factor to be that of record food and energy prices. The BoE is now faced with growing concern of stagflation, with a drop in growth and an upward pressure in inflation. Overall the GBPUSD traded with a low of 1.9444 and a high of 1.9633 before closing the day at 1.9621 in the New York session. CPI and Retail Sales now take the spotlight as traders try delving into how high inflation remains in the UK.

Australian Dollar (AUD)

The Australian Dollar (AUD) was subject to equity market and commodities rallying through the day. Overall AUDUSD traded with a low of 0.9358 and a high of 0.9475 before closing the day at 0.9471 in the New York session.

Gold

Gold (XAU) fell as Oil paired its gains. XAU effectively traded in a range of 878.35 and a high of 889.70.

Technical Analysis: Forex Currency Updates Today

Euro (EUR)

Euro – 1.55525 : Initial support at 1.5367 (May 12 low) followed by 1.5284 (May 8 low). Initial resistance is now located at 1.5571 (May 12 high) followed by 1.5595 (May 6 high).

Yen (JPY)

Yen – 103.90 : Initial support is located at 102.26 (Apr 18 low) followed by 101.91 (38.2% retracement of the 95.76 low). Initial resistance is now at 104.04 (May 12 high) followed by 104.96 (May 8 low).

Pound Sterling (GBP)

Pound – 1.9530 : Initial support at 1.9444 (May 12 low) followed by 1.9410 (Feb 21 low). Initial resistance is now at 1.9633 (May 12 high) followed by 1.9736 (May 7 high).

Australian Dollar (AUD)

Australian Dollar – 0.9460 : Initial support a 0.9350 (May 8 low) followed by 0.9342 (May 5 low). Initial resistance is now at 0.9483 (May 12 high) followed by 0.9510 (May 6 high).

Gold (XAU)

Gold – 883.00 : Initial support at 864.20 (May 7 low) followed by 846.00 (May 2 low). Initial resistance is now at 889.80 (May 12 high) followed by 896.50 (Apr 25 high).

Oil sets record highs, again. US trade deficit narrows sharply.

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was mixed against a number of majors on Friday as the Trade deficit narrowed sharply for the month of March, with imports falling 2.9% the most since the last recession ended. The U.S. traded deficit narrowed from US$61.7 billion to US$58.2 billion. In U.S share markets the NASDAQ fell by -5.72 points (-0.23%) whilst the Dow Jones was also down by -120.90 points (-0.94%) as shares in the world’s largest insurer, AIG, fell following a reported record quarterly loss. Crude oil traded at a record high once again touching US$126.25 in after hours trading. Crude closed the session up by US$2.56 a barrel to US$125.40. Looking ahead, Fed officials are scheduled to speak on the U.S. economic outlook and financial markets today.

European Euro

The Euro (EURO) continued its late week revival; following the ECB signal that it was unlikely cuts would materialize. Overall the EURUSD traded with a low of 1.5394 and a high of 1.5489 before closing the day at 1.5479 in the New York session.

Japanese Yen (JPY)

The Japanese Yen (JPY) continued its rally as equity market fell on the back of AIG profit earnings. Japanese stocks also fell adding to the moves, with several large organizations including Toyota Motor Corp. forecasted lower profit earnings in light of the global economic slowdown. Overall the USDJPY traded with a low of 102.62 and a high of 103.96 before closing the day at 102.93 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) eased against a number of majors on signs that the faltering economy would prompt the Bank of England to resume it easing cycle. U.K. home repossession claims by mortgage lenders rose 16 percent from a year ago to the highest since the early 1990s. Overall the GBPUSD traded with a low of 1.9461 and a high of 1.9598 before closing the day at 1.5479 in the New York session. Looking ahead, key figures in the form of PPI are scheduled out of the UK on Monday.

Australian Dollar (AUD)

The Australian Dollar (AUD) was range bound and held firm on sturdy commodities, despite falling equities. Overall the AUDUSD traded with a low of 0.9385 and a high of 0.9465 before closing the day at 0.9430 in the New York session.

Gold

Gold (XAU) rose further on supply concerns and record oil prices. XAU jumped by US$3.70 an ounce to US$885.80.

Technical Analysis: Forex Currency News Today

Euro (EUR)

Euro – 1.5460 : Initial support at 1.5393 (May 9 low) followed by 1.5284 (May 8 low). Initial resistance is now located at 1.5540 (May 7 high) followed by 1.5595 (May 6 high).

Yen (JPY)

Yen – 102.85 : Initial support is located at 102.26 (Apr 18 low) followed by 101.91 (38.2% retracement of the 95.76 low). Initial resistance is now at 103.97 (May 9 high) followed by 104.96 (May 8 low).

Pound Sterling (GBP)

Pound – 1.9510 : Initial support at 1.9410 (Feb 21 low) followed by 1.9363 (Feb 20 reaction low). Initial resistance is now at 1.9570 (May 9 high) followed by 1.9621 (May 8 high).

Australian Dollar (AUD)

Australian Dollar – 0.9435 : Initial support a 0.9350 (May 8 low) followed by 0.9342 (May 5 low). Initial resistance is now at 0.9510 (May 6 high) followed by 0.9544 (Apr 23 high).

Gold (XAU)

Gold – 883.00 : Initial support at 864.20 (May 7 low) followed by 846.00 (May 2 low). Initial resistance is now at 889.65 (May 9 high) followed by 896.50 (Apr 25 high).

ECB and BoE hold in attempt to balance inflation and growth.

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was volatile versus a number of currencies thorough out all session on Thursday. US wholesale inventories data unexpectedly fell for the first time in more than a year in March, while wholesale sales posted a stronger-than-expected rise of 1.6 percent. Stocks rose in U.S. share markets the NASDAQ was 12.75 points (0.52%) whilst the Dow Jones 52.43 points (0.41%). Crude oil traded at another record high on Thursday for the fourth straight day, hitting US$124.61. Oil finished the day up by US$0.16 a barrel to US$123.69. US Trade Balance is scheduled for release today with markets expecting the trade deficit to narrow to -61 billion.

European Euro

The Euro (EURO) rebounded as the ECB kept rates on hold at 4.00% and signaled that policy makers were still committed to fighting inflation, although noting that “risks to growth prevail”. Overall the EURUSD traded with a low of 1.5284 and a high of 1.5442 before closing the day at 1.5401 in the New York session.

Japanese Yen (JPY)

The Japanese Yen (JPY) was range bound for much of the session, tracking other majors and equity markets. Overall the USDJPY traded with a low of 103.41 and a high of 104.93 before ending the session at 103.84 in New York.

Pound Sterling (GBP)

The Sterling (GBP) saw the Bank of England also keep rates unchanged at 5.00% as widely expected, in an attempt to balance upside inflation and slowing growth in light of credit turmoil. Overall the GBPUSD traded with a low of 1.9504 and a high of 1.9621 before closing the day at 1.9551 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) was boosted by strong jobs data in Thursday, despite the Unemployment rate rising from 4.1% to 4.2%. With Employment change jumping to 25,400 new jobs (Forecast: 10,000), The AUD rallied in the Asian session as the Labour force remains healthy. Overall the AUDUSD traded with a low of 0.9350 and a high of 0.9441 before closing the day at 0.9425 in the New York session.

Gold

Gold (XAU) rebounded well on Thursday, as record oil prices pushed the appeal for gold as an inflation hedge. Overall XAU traded with a low of 864.00 and a high of 885.25

Technical Analysis: Forex Today

Euro (EUR)

Euro – 1.5405 : Initial support at 1.5284 (May 8 low) followed by 1.5230 (50% retracement of the 1.4440 to 1.6019). Initial resistance is now located at 1.5442 (May 8 high) followed by 1.5540 (May 7 high).

Yen (JPY)

Yen – 103.75 : Initial support is located at 103.41 (May 8 low) followed by 103.23 (Apr 29 low). Initial resistance is now at 104.96 (May 8 high) followed by 105.71 (May 2 low).

Pound Sterling (GBP)

Pound – 1.9560

Initial support at 1.9503 (May 8 low) followed by 1.9410 (Feb 21 low). Initial resistance is now at 1.9621 (May 8 high) followed by 1.9736 (May 7 high).

Australian Dollar (AUD)

Australian Dollar – 0.9435 : Initial support a 0.9350 (May 8 low) followed by 0.9342 (May 5 low). Initial resistance is now at 0.9510 (May 6 high) followed by 0.9544 (Apr 23 high).

Gold (XAU)

Gold – 883.00 : Initial support at 863.80 (May 7 low) followed by 846.00 (May 2 low). Initial resistance is now at 885.80 (May 8 high) followed by 896.50 (Apr 25 high).

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) rallied broadly as productivity out of the world’s largest economy increased whilst Pending Home sales fell by -1% as expected. Earlier in the day Fed official Hoenig did emphasis the risk to upwards inflation stating that rates will need to be raised in a timely manner to counter the threat, further fuelling speculation that the easing cycle may e at its end. In other news, US consumer credit rose by $15.29 billion in March, its biggest rise since November. In US Share Markets the NASDAQ was down by -44.82 points (-1.8%) whilst the Dow Jones was also lower by -206.48 (-1.59%). Crude oil continued to set record highs for the third straight day on supply fears trading at US$123.89 before ending the session up US$1.69 a barrel to US$123.53.

European Euro

The Euro (EURO) declined rapidly on the back of poor retail sales figures. European retail sales declined 1.6 percent in March, the most since at least 1995 and twice as much as economists forecast, as soaring fuel and food costs sapped consumer spending. Overall the EURUSD traded with a low of 1.5453 and a high of 1.5595 before ending the session at 1.5528 in New York. Looking ahead the ECB is expected to keep rates on hold today at 4.00% with focus on the subsequent press conference.

Japanese Yen (JPY)

The Japanese Yen (JPY) tracked other markets with Japanese equities trading at four month highs. Overall the USDJPY traded at a low of 104.02 and a high of 105.12 before closing the day at 104.73 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) fell to a 2 1/2-month low against the dollar after an industry report showed U.K. consumer confidence declined to the weakest in at least four years last month. Furthermore, U.K. manufacturing unexpectedly declined adding to expectation of rate cuts materializing out of the UK. Overall the GBPUSD traded with a low of 1.9637 and a high of 1.9772 before closing the day at 1.9729 in the New York session. The BoE is expected to keep rates on hold at 5.00% today.

Australian Dollar (AUD)

The Australian Dollar (AUD) eased against a broadly stronger dollar and further hindered by a drop in gold prices. Overall the AUDUSD trade with a low of 0.9436 and a high of 0.9501 before closing the day at 0.9497 in the New York session. UPDATE: Unemployment Rate jumps to 4.2% (4.1%) for the month April with 25k new jobs.

Gold

Gold (XAU) paired much of its gains on poor data out of the EZ. Overall the XAU traded with a low of 864.60 and a high 881.05.

Technical Analysis: Forex Now

Euro (EUR)

Euro – 1.5355 : Initial support at 1.5366 (May 7 low) followed by 1.5361 (Mar 2 Low). Initial resistance is now located at 1.5540 (May 7 high) followed by 1.5595 (May 6 high).

Yen (JPY)

Yen – 104.80 : Initial support is located at 104.03 (May 6 low) followed by 103.23 (Apr 29 low). Initial resistance is now at 105.71 (May 2 high) followed by 106.65 (Feb 28 low).

Pound Sterling (GBP)

Pound – 1.9530

Initial support at 1.9504 (May 7 low) followed by 1.9410 (Feb 21 low). Initial resistance is now at 1.9736 (May 7 high) followed by 1.9913 (Apr 29 high).

Australian Dollar (AUD)

Australian Dollar – 0.9420 : Initial support a 0.9418 (May 7 low) followed by 0.9342 (May 5 low). Initial resistance is now at 0.9510 (May 6 high) followed by 0.9544 (Apr 23 high).

Gold (XAU)

Gold – 868.30 : Initial support at 863.80 (May 7 low) followed by 846.00 (May 2 low). Initial resistance is now at 883.00 (May 6 high) followed by 896.50 (Apr 25 high).

OIL trades at a fresh record high boosting XAU

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) eased further against a number of majors as market sentiment surrounding the manufacturing and services remain gloomy for the remaining part of 2008. In what was an otherwise quiet day in US markets, share markets saw the NASDAQ rise by 19.19 points (+0.78%) whilst the Dow Jones was also higher by 51.29 points (+0.40%). Crude oil traded once again at a fresh record high for the second straight day reaching US$122.73 a barrel, before ending the session higher at US$1.87 to end at US$121.84. Looking ahead, focus shifts towards the housing sector with pending home sales for the month of March expected to decline by -1% less than the previous of -1.9%.

European Euro

The Euro (EURO) was buoyed by strong PPI figures on Tuesday, adding to pressure that the ECB will need to maintain interest rates on hold. Overall the EURUSD traded with a low of 1.5453 and a high of 1.5595 before closing the day at 1.5528 in the New York session. Looking Ahead, ECB officials are scheduled to speak whilst attention will also be placed on Retail Sales figures for the month March. Forecasts lie at 0.2%, better then previous figures of -0.5%.

Japanese Yen (JPY)

The Japanese Yen (JPY) once again was subject to other majors due to closed markets; as analysts say Asian liquidity is lower than average. Overall the USDJPY traded with a low of 104.02 and a high of 105.12 before closing the day at 104.73 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) saw PM services fall to 50.4 (its lowest reading since March 2003) from the previous 52.1 adding to concerns in UK growth. Overall the GBPUSD traded with a low of 1.9637 and a high of 1.9772 before closing the day at 1.9729 in the New York session. An interesting data day is scheduled for the pound, with production data taking center stage.

Australian Dollar (AUD)

The Australian Dollar (AUD) saw the RBA hold rates as expected at 7.25%, although accompanying statements signaled that current monetary policy remains adequate for the time being, on expectations that domestic demand will slow. The Aussie Dollar was later boosted by surging commodity and energy prices. Overall the AUDUSD traded with a low of 0.9436 and a high of 0.9501 before closing the day at 0.9797 in the New York session.

Gold

Gold (XAU) hit a one-week high as crude oil traded record high. Overall the XAU traded with a low of 872.60 and a high of 882.70.

Technical Analysis: Forex Updates Today

Euro (EUR)

Euro – 1.5505 : Initial support at 1.5453 (May 6 low) followed by 1.5361 (Mar 2 Low). Initial resistance is now located at 1.5595 (May 6 high) followed by 1.5661 (Apr 29 high).

Yen (JPY)

Yen – 104.90 : Initial support is located at 104.03 (May 6 low) followed by 103.23 (Apr 29 low). Initial resistance is now at 105.13 (May 6 high) followed by 105.74 (May 2 low).

Pound Sterling (GBP)

Pound – 1.9695 : Initial support at 1.9635 (May 6 low) followed by 1.9624 (Apr 30 low). Initial resistance is now at 1.9913 (Apr 29 high) followed by 1.9966 (Apr 28 high).

Australian Dollar (AUD)

Australian Dollar – 0.9480 : Initial support a 0.9433 (May 6 low) followed by 0.9342 (May 5 low). Initial resistance is now at 0.9510 (May 6 high) followed by 0.9544 (Apr 23 high).

Gold (XAU)

Gold – 877.30 : Initial support at 846.00 (May 2 low) followed by 971.60 (May 6 low). Initial resistance is now at 883.10 (May 6 high) followed by 896.50 (Apr 25 high).

Westpac has announced that Australian dollar shall reach its peak early next year. It has become the first bank to announce that the exchange rate for the Australian dollar vs. the US dollar shall reach 1.01 by early 2009.

Westpac’s predictions are the strongest amongst all other retail banks in Australia. It also estimated that it would take 6.5% increase to move the dollar to parity. Australian Dollar’s gain had been average 12% since past 5 years. According to Global head of Westpac, Bill Evans, the Australian Dollar shall peak above its parity in March 2009. It would hit US 96 cents in December this year itself. Currently, Australian Dollar is trading at 95 cents against the US Dollar.

"In the context of regular volatility in the Australian dollar, a 6.5 per cent move from current levels would be quite unremarkable," said Mr. Evans. "For the last five years the currency has averaged a 12 per cent gain," he added.

Mr. Evans also quoted that weakening US economy is one of the major contributing factors for strengthening of Australian Dollar. Commodity prices have also boosted the strength of Australian Dollar. Prices of gold and oil had also jumped over night which led to strengthening of the currency. Moreover, the demand in prices of coal and steel would also further escalate the demand for the Australian currency.

Westpac is amongst the four major banks in Australia and has been the first bank to claim the strengthening of currency. Mr. Gibbs from ABN Amro Australia also quoted that they are expecting a good run and the market is long.

Inflation has been on rise in Australia and Reserve Bank of Australia had raised its concerns over the same. However, it left the interest rates unchanged at 7.2%. It also kept the official cash rate also on hold for the second consecutive month.

ISM Services expands as oil trades at record highs.

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gave up much of its previous week gains despite further positive data out of the US in regards to Services ISM coming above expectations at 52 with markets forecasting a figure of 49.8. Critically the figure was above key 50 levels indication that the sector had expanded for the month of April. In U.S. share markets the NASDAQ fell by 12.87 points (-0.52%) whilst the Dow Jones also ended lower by -88.66 points (-0.68%). Crude oil traded with a record high of US$120.36 before ending the day up a total of US$3.65 a barrel to US$119.97 with supply concerns remaining in Nigeria.

European Euro

The Euro (EURO) rebounded from its multi-week lows it is perceived European Central Bank is winning Europe's political leaders over to its policy of focusing on fighting inflation even as economic growth slows. Overall the EURUSD traded with a low of 1.5425 and a high of 1.5519 before closing the day at 1.5496 in the New York session.

Japanese Yen (JPY)

The Japanese Yen (JPY) tracked other majors as Japanese markets remained closed for the day. Upon positive readings in US ISM services the USDJPY came within a two month high of 105.62 and a low of 104.74 before closing the day at 104.79 in the New York session. Japanese markets will remain closed on Tuesday.

Pound Sterling (GBP)

The Sterling (GBP) although saw markets closed for a bank holiday, remained pressured ahead of the BoE rate announcement this week, although widely expected to hold, some speculation persists that there is a slight chance of a rate cut. Overall the GBPUSD traded wit ha low of 1.9657 and a high of 139783 before closing the day at 1.9717 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) rallied ahead of an RBA rate announcement, and was further boosted by rebounding commodity and energy prices. Overall the AUD and the USD traded with a low of 0.9344 and a high of 0.9466 before closing the day at 0.9465 in the New York session.

Gold

Gold (XAU) recovered trading towards key resistance levels of 873.00. XAU traded with a low of 859.55 and a high of 872.20

Technical Analysis: Forex News Today

Euro (EUR)

Euro – 1.5520 : Initial support at 1.5361 (May 2 low) followed by 1.5342 (Mar 24 reaction Low). Initial resistance is now located at 1.5520 (May 5 high) followed by 1.5661 (Apr 29 high).

Yen (JPY)

Yen – 104.75 : Initial support is located at 104.34 (May 2 low) followed by 103.23 (Apr 29 low). Initial resistance is now at 105.70 (May 2 high) followed by 105.71 (61.8% retracement of 114.66 to 95.76 decline).

Pound Sterling (GBP)

Pound – 1.9735 : Initial support at 1.9657 (May 5 low) followed by 1.9624 (Apr 30 low). Initial resistance is now at 1.9913 (Apr 29 high) followed by 1.9966 (Apr 28 high).

Australian Dollar (AUD)

Australian Dollar – 0.9465 : Initial support a 0.9272 (Apr 18 low) followed by 0.9249 (50% retracement of the 0.8953 to 0.9544 decline). Initial resistance is now at 0.9473 (Apr 30 high) followed by 0.9496 (Apr 24 high).

Gold (XAU)

Gold – 872.65 : Initial support at 845.87 (May 2 low) followed by 945.80 (Former resistance Nov 8). Initial resistance is now at 881.90 (May 1 high) followed by 896.50 (Apr 25 high).

Another volatile week saw record highs for Euro and Aussie dollar before US surged following dampened Euro outlook and stabilizing equity markets

Last week’s Currency Trading Review

For the week starting 28/04/08.
The Dollar was again volatile last week, beginning the week softly before gathering steam as speculation grows around the notion the Fed is nearing the end of cutting rates. Fed officials avoided the topic of monetary policy through the week and focused more on the need for transparency in the financial system to allow the crisis to be fixed. New Home Sales decreased to 526k, down from the forecasted 580k. Durable Goods Orders came in slightly above the predicted -1.1%. Whilst jobless claims hit two-month lows of 342k. 73% of the 263 firms who announced quarterly earnings results this week either matched or bettered expectations which really aided the dollar strength. Most notably, Citigroup announced a loss of US$5bn, half of the forecasted US$10bn loss. These results, combined with the growing belief the Fed will cease cutting rates after its next meeting really strengthened the dollar against the majors. The Euro fluctuated immensely through the week as conflicting commentary and poorer than expected data results led to sharp movements. ECB officials began the week hawkish, with Liebscher talking about rising energy prices as the cause of increased wage demands and prices, which then saw the Euro crack the 1.6000 level for the very first time. The Euro then faced a large sell-off as ECB president Trichet came out and stated strength in the Euro currency is not good for the Euro economy. PMI Manufacturing came in at 50.8, slightly above the key 50 expansion level, however down on the forecasted 51.7 level. Combined with the unexpected drop in German Business Index to 102.4 for April from 104.8 previously, it signalled to the market the Euro may be topping out and economic growth will slow throughout the year. The EURUSD opened at 1.5801 and closed at 1.5605. The Japanese Yen weakened through the week as strength in the U.S dollar and equity markets prompted confidence in the carry trades. The big piece of data to come out from Japan was the Nationwide CPI figure of 1.2% coming in as predicted, up from 1.0% for Q4. The USDJPY opened at 103.86 and closed in New York at 104.46. The GBP also fluctuated through the week as the BoE announced a plan to ease the liquidity problems facing UK financial lenders by swapping 50 billion pounds of mortgage back securities with government treasury bonds. The Minutes from the BoE’s most recent rate meeting were released which surprised the market as a 3 way split in voting resulted with a 6-1-2 vote between 25bps cut, 50bps cut and no change. GDP for Q1 came in as expected at 0.4%, slightly down from 0.6% for Q4. Year-on-year GDP came in at 2.5%, slightly below expectations of 2.6% and down on the previous result of 2.8%. Retail sales results were also trimmed 0.4% to 4.6%. The GBP opened at 1.9941 and closed in New York at 1.9889. The AUD reached 24-year highs on the back of stronger than expected CPI figures of 1.3% m/m and 4.2% y/y, higher than the forecasted 1.0% m/m and 4.0% y/y. Despite this strong result it is still widely expected the RBA will maintain rates at their current level of 7.25%. Later in the week, U.S strength and lower commodity prices saw the Aussie dollar pair its gains and close at 0.9319 after opening the week at 0.9337. The RBNZ maintained rates at 8.25% after its meeting last week, whilst the CAD was affected after the BoC cut rates by 50bps to 3.0% last week.

This Forex Trading Week Preview

In the States; continued volatility is expected as a big week of data releases lies ahead. The major announcement for the week is the Interest Rate announcement on Wednesday with expectations of a 25bps cut to 2.0%. The Unemployment Rate for April is announced on Friday with forecasts of an increase from 5.1% in March to 5.3%. Nonfarm Payrolls are also released on Friday with suggestions of -100k, up from -80k for March. Chicago’s PMI for April is out on Wednesday with expectations of a level at 47.5, down from 48.2 for March. Finally, Q1 GDP is to be released on Wednesday with forecasts of no growth for Q1, down from 0.6% for Q4. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; Germany’s Consumer Confidence is announced on Monday for the month of May with forecasts of 4.4, down from 4.6 for April. Germany’s CPI is also released for April with expectations of no change from March’s level of 3.1%. Euro Zone’s April Consumer Confidence is also released on Wednesday with predictions of -14, up from -12 for March. Euro’s CPI is also announced on Wednesday with suggestions of a downgrade from 3.6% in March to 3.5% for April. Later in the week, PMI Manufacturing for April is out with forecasts of a level at 50.8, down from 52 for March. We will provide our previews and reviews of these data releases in the daily summary.

In the UK; Nationwide House Prices for April is announced on Monday with predictions of a further decrease of -0.7%, worse than the -0.6% for March. March’s Mortgage Approvals is also announced on Tuesday with suggestions of a drop from 73k for February, down to 69k. BoE Governor King speaks in Parliament on Tuesday as does BoE’s Blanchflower who was the only BoE official who voted for a 50bps rate cut at their last meeting, so expect a rather dovish outlook. On Thursday, PMI Manufacturing is announced for April and it is forecast that it will drop to 50.9, down from 51.3 in March, but still remains above that key 50 expansion level. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; the Unemployment rate for March is announced on Wednesday with predictions of no change from their current levels of 3.9%. Household Spending is also out on Wednesday for the month of March with a growth of 0.6% predicted, up from 0% for February. Wednesday also sees the BoJ target rate announcement with thoughts of no change from their current levels of 0.5%. We will provide our previews and reviews of these data releases in the daily summary.

In Australia;the NAB Business Confidence for Q1 is announced on Tuesday. No forecast has been made, however Q4 results saw a level of 6. Private Sector Credit for AMrch is released on Wednesday with no change expected from February’s level of 0.7%. Finally, on Friday, Retail Sales figures for March are announced with forecasts of a contraction to -0.3%, down from February’s level of -0.1%. We will provide our previews and reviews of these data releases in the daily summary.

Technical Analysis: Forex Trading Weekly Update

Euro (EUR)

Euro – 1.5620 : Initial support at 1.5556 (Apr 25 low) followed by 1.5510 (Apr 3 reaction Low). Initial resistance is now located at 1.5707 (Apr 25 high) followed by 1.5891 (Apr 24 high).

Yen (JPY)

Yen – 104.60 : Initial support is located at 103.90 (Apr 25 low) followed by 103.32 (Apr 24 low). Initial resistance is now at 104.82 (Apr 25 high) followed by 105.58 (76.4% retracement of the 108.61 to 95.76 decline).

Pound Sterling (GBP)

Pound – 1.9825 : Initial support at 1.9677 (Apr 25 low) followed by 1.9600 (Apr 16 low). Initial resistance is now at 1.9974 (Apr 23 high) followed by 1.9999 (50% retracement of the 2.0398 to 1.9600 decline).

Australian Dollar (AUD)

Australian Dollar – 0.9350 : Initial support a 0.9272 (Apr 18 low) followed by 0.9249 (A50% retracement of the 0.8953 to 0.9544 advance). Initial resistance is now at 0.9422 (Apr 25 high) followed by 0.9496 (Apr 24 high).

Gold (XAU)

Gold – 890.90 : Initial support at 878.30 (Apr 25 low) followed by 873.00 (Apr 1 reaction low). Initial resistance is now at 906.50 (Apr 24 high) followed by 922.86 (Apr 23 high).

US Unemployment and Payrolls boosts dollar. All eyes on ISM services

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was volatile gaining against a number of majors as jobs data signaled the Feds rate cut earlier in the week may be nearing the end of the easing cycle. Non Farm Payrolls for the month of March came in well above expectations only losing -20K jobs, significantly higher than the forecasted loss of -78k jobs. Adding to the dollar sentiment was Unemployment Rate falling from 5.1% to 5.0% for the month. In U.S. share markets the NASDAQ was down by -3.72 (-0.15%) whilst the Dow Jones rose by 47.80 points (+0.37%). Crude oil rebounded trading up by US$ 3.80 a barrel to US116.32 as investors were buoyed by NFP data. Looking Ahead,Services ISM for the month of April is expected to be seen at 49 down from the previous 49.6.

European Euro

The Euro (EURO) continued its decline to six week lows versus the dollar hampered by growing expectations that recent rate cuts out of the U.S. may have run its course. The Euro was also hampered by German Retail Sales figures which came in below expectations. Overall the EURUSD traded with a low of 1.5361 and a high of 1.5498 before closing the day at 1.5416 in the New York session.

Japanese Yen (JPY)

The Japanese Yen (JPY) weakened to a 2 month high against the dollar as Jobs data aided a broad USD rally. Overall the USDJPY traded with a low of 104.36 and a high of 105.70 before closing the day at 105.25 in the New York session. Japanese markets will be closed on Monday

Pound Sterling (GBP)

The Sterling (GBP) weakened against the dollar, although managed to touch a five-week high against the Euro as weak UK housing data was largely ignored. Overall the GBPUSD traded with a low of 1.9707 and a high of 1.9897 before closing the day at 1.9739 in the New York session. UK markets will be closed on Monday due to Bank Holiday.

Australian Dollar (AUD)

The Australian Dollar (AUD) rose from lows in the European session, and was the best performing currency despite a broad dollar rally. The Aussie held firm as equity markets rebounded, whilst was boosted earlier with positive Retail Sales figures, coming in well above expectations at 0.5% for the month of March.

Gold

Gold (XAU) rebounded from four month lows as US jobs data boosted confidence in attaining long XAU positions. XAU traded with a low of 846.00 and a high of 858.75.

Technical Analysis: Latest Forex Currency Update

Euro (EUR)

Euro – 1.5450 : Initial support at 1.5361 (May 2 low) followed by 1.5342 (Mar 24 reaction Low). Initial resistance is now located at 1.5499 (May 2 high) followed by 1.5661 (Apr 29 high).

Yen (JPY)

Yen – 105.54 : Initial support is located at 104.34 (May 2 low) followed by 103.23 (Apr 29 low). Initial resistance is now at 105.71 (May 2 high) followed by 107.44 (61.8% retracement of the 114.66 to 95.76 decline).

Pound Sterling (GBP)

Pound – 1.9745 : Initial support at 1.9706 (May 2 low) followed by 1.9624 (Apr 30 low). Initial resistance is now at 1.9913 (Apr 29 high) followed by 1.9966 (Apr 28 high).

Australian Dollar (AUD)

Australian Dollar – 0.9360 : Initial support a 0.9272 (May 18 low) followed by 0.9249 (50% retracement of the 0.8953 to 0.9544 decline). Initial resistance is now at 0.9445 (May 1 high) followed by 0.9473 (Apr 30 high).

Gold (XAU)

Gold – 864.20 :
Initial support at 845.87 (May 2 low) followed by 845.80 (Former resistance Nov 8). Initial resistance is now at 881.90 (May 1 high) followed by 896.50 (Apr 25 high).

Dollar climbs on the back of better than expected ISM Manufacturing and surging equity markets.

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) strengthened against most of the majors on Thursday as the U.S saw positive data released combined with a surging equity market and more interest rate conviction which prompted confidence in the dollar. The ISM Manufacturing Index for April came in above expectations of 48, matching March’s index of 48.6. The PCE Index for March came in above the previous level of 0.1%, seeing a result of 0.3%. Core PCE bettered suggestions of 0.1%, with a result of 0.2%. Jobless claims did come in worse than the expected 360k with a result of 380k. U.S personal income rose 0.3% in March with spending up 0.4%, ahead of expectations. In share market news, U.S equities soared as more certainty in interest rates and positive corporate news gave investors confidence. The Dow Jones finished 189 points higher (1.5%), whilst the NASDAQ surged 67 points (2.8%). Oil prices fell in response to a stronger dollar, weakening U.S demand and the ending of a strike by oil workers in Nigeria. Prices dropped US94c a barrel to US$112.52. Looking ahead, Non-farm Payrolls for April is announced on Friday with expectations of a drop to -100k, worse than March’s result of -80k. The Unemployment rate for April is also announced on Friday, with forecasts of a rise from 5.1% to 5.3%.

European Euro

The Euro (EURO) fell to a five week low against the dollar as stronger than predicted U.S data results and rising equity markets prompted investors to support the dollar and sell-off the Euro, despite it being a public holiday with no data being released. The EURUSD traded at a high of 1.5643 and a low of 1.5431, before closing at 1.5458 in New York. Looking ahead, PMI Manufacturing for April is announced with forecasts of an index of 50.8, down from 52 for March, but still above that key 50 expansion level. German Retail Sales figures for March are due out with predictions of a growth of 0.6%, up from February’s level of -0.7%.

Japanese Yen (JPY)

The Japanese Yen (JPY) remained weak against the dollar owing to rising U.S equity markets and more confidence in the Fed’s rate stance prompting investors toward the higher yielding dollar. The USDJPY traded at a high of 104.58 and a low of 103.55, before closing at 104.39 in New York. No data is being released from Japan on Friday.

Pound Sterling (GBP)

The Sterling (GBP) was resilient against the dollar and pushed higher against its European counterparts on Thursday. UK factory PMI saw a result of 51.0 in April, slightly better than the 50.9 forecast, but a drop from 51.3 for March. The GBPUSD traded at a high of 1.9909 and a low of 1.9713, before closing at 1.9740 in New York trading. No data is released on Friday.

Australian Dollar (AUD)

The Australian Dollar (AUD) weakened on Thursday as the U.S dollar strengthened and commodity prices softened. The Aussie was also hit by weak dwelling approvals yesterday. The AUDUSD traded at a high of 0.9445 and a low of 0.9308, before closing at 0.9337 in new York trading. Looking ahead, Retails Sales figures for March are to be released on Friday with forecasts of a drop from -0.1% to -0.3%.

Gold

Gold (XAU) prices fell on Thursday in line with commodity prices as a whole owing to U.S dollar strength. Prices fell US$14.20 an ounce to US$850.90.

Technical Analysis: Forex News for the 2nd May, 2008

Euro (EUR)

Euro – 1.5465 : Initial support at 1.5510 (Apr 3 reaction low) followed by 1.5408 (Mar 25 Low). Initial resistance is now located at 1.561 (Apr 29 high) followed by 1.5707 (Apr 25 high).

Yen (JPY)

Yen – 104.75 :
Initial support is located at 103.23 (Apr 29 low) followed by 102.68 (Apr 22 low). Initial resistance is now at 104.88 (Apr 30 high) followed by 105.58 (76.4% retracement of the 108.61 to 95.76 decline).

Pound Sterling (GBP)

Pound – 1.9775 : Initial support at 1.9624 (Apr 30 low) followed by 1.9600 (Apr 16 reaction low). Initial resistance is now at 1.9913 (Apr 29 high) followed by 1.9966 (Apr 28 high).

Australian Dollar (AUD)

Australian Dollar – 0.9310 : Initial support a 0.9308 (May 1 low) followed by 0.9294 (Apr 29 low). Initial resistance is now at 0.9445 (May 1 high) followed by 0.9473 (Apr 30 high).

Gold (XAU)

Gold – 850.00 : Initial support at 847.10 (May 1 low) followed by 845.80 (Former resistance Nov 8). Initial resistance is now at 881.90 (May 1 high) followed by 896.50 (Apr 25 high).