U.S. Dollar Trading (US) stocks weakened in the US session under pressure from weak Chinese and European PMI surveys. The ongoing European debt crisis and the subsequent Euro selling is leading to USD strength across the board. In US stocks, DJIA -130 points closing at 12381, S&P -15 points closing at 1317 and NASDAQ -44 points closing at 2758. Looking ahead, FOMC Member Fisher Speaks. April New Home Sales forecast 0.3% vs. 0.3%.
The Euro (EUR) the negative outlook placed on Belgium combined with the widening Greek/Portugal/Ireland bond spreads to send the EUR/USD to 1.4000. A few looks below in the European session met some strong buyers and the pair reversed in the US session to 1.4070. May EU Manufacturing PMI at 54.8 vs. 58 previously. Overall the EUR/USD traded with a low of 1.3968 and a high of 1.4136 before closing the day around 1.4040 in the New York session. Looking ahead, May German IFO forecast at 110 vs. 110.4 previously.
The Japanese Yen (JPY) cross selling provided a good opportunity for buyers and the market rebounded back to Y82 in the late US trade. EUR/JPY tested support at Y114 and was able to finish stronger at Y115. The outlook is very mixed with the market correction in stocks and Oil is threatening the longer term uptrend. Overall the USD/JPY traded with a low of 81.30 and a high of 82.10 before closing the day around 81.80 in the New York session.
The Sterling (GBP) hit intra month lows below 1.6100 as the USD strength persistence given weak stocks. Rumors that Moody’s will be downgrading UK banks also hurt the GBP with EUR/GBP finishing higher even with the Eurozone issues. Overall the GBP/USD traded with a low of 1.6055 and a high of 1.6235 before closing the day at 1.6100 in the New York session.
The Australian Dollar (AUD) broke below the Key 1.0500 level but once the selling subsided bargain hunters emerged to buy the high yielding Aussie. The outlook is largely dependent on stock movement with 1.1000 now seen as a medium term top and 1.0000 the bear’s target. Overall the AUD/USD traded with a low of 1.0477 and a high of 1.0642 before closing the day at 1.0520 in the New York session.
Oil & Gold (XAU) Gold edged higher as sovereign bond yields crept higher in the Eurozone. Silver is struggling to follow the yellow metal as the recent plunge scared off speculators. Overall trading with a low of USD$ 1503 and high of USD $ 1518 before ending the New York session at USD$ 1516 an ounce. Oil crashed lower finding support under $ 97 a barrel. WTI Oil Closed -$ 2.4 at $ 97.70 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro – 1.4070
Initial support at 1.4021 (Mar 28 low) followed by 1.4000 (Big level support). Initial resistance is now located at 1.4346 (May 20 high) followed by 1.4500 (Key level)
Yen – 81.80
Initial support is located at 80.94 (May 18 low) followed by 80.00 (Big Level support). Initial resistance is now at 82.28 (April 28 low) followed by 82.79 (Apr 27 High).
Pound – 1.6120
Initial support at 1.6091 (Apr 5 low) followed by 1.6000 (Big Level Support). Initial resistance is now at 1.6308 (May 13 high) followed by 1.6380 (May 12 high).
Australian Dollar – 1.0550
Initial support at 1.0500 (Big Figure Support) followed by the 1.0443 (Apr 19 low). Initial resistance is now at 1.0717 (May 13 high) followed by 1.0953 (May 3 high).
Gold – 1518
Initial support at 1485 (May 18 low) followed by 1462 (May 5 low). Initial resistance is now at 1526 (May 11 high) followed by 1543 (May 4 high).
Oil – 98.40
Initial support at 98.00 (Intraday Support) followed by 96.50 (Intraday Support). Initial resistance is now at 100.00 (Intraday resistance) followed by 103.00 (Intraday Resistance).
Written by Anthony Darvall