U.S. Dollar Trading (US) stock markets rallied around the world but the reaction in FX markets was mixed. Highs in Europe on most majors came under profit taking and the USD finished well off lows. USD/JPY and USD/CHF provided a lot of support. In US stocks, DJIA +128 points closing at 12569, S&P +14 points closing at 1345 and NASDAQ +38 points closing at 2835. Looking ahead, ADP May Employment forecast at 175k vs. 179k. May ISM Manufacturing forecast at 57.4 vs. 60.4.
The Euro (EUR) hit highs above 1.4400 on the back of the growing belief more bailout funds for Greece would be available and default would be avoided. German May Jobless fell 8k and the Unemployment rate fell to 7.0% from 7.1% previously. Overall the EUR/USD traded with a low of 1.4256 and a high of 1.4353 before closing the day around 1.4370 in the New York session. Looking ahead, May PMI Manufacturing forecast at 47.5 vs. 47.6 previously.
The Japanese Yen (JPY) was a big mover coming under pressure when Moody’s put the Aa2 rating on negative watch. USD/JPY surged back above Y81 and the found resistance at Y81.75. EUR/JPY was even more aggressive pushing above Y117. Overall the USD/JPY traded with a low of 80.50 and a high of 81.79 before closing the day around 81.50 in the New York session.
The Sterling (GBP) rallied above 1.6500 but found very strong resistance at 1.6550 and when the market reversed fresh day lows were seen in the near 1.6400. GBP/JPY tested Y135 before reversing late in the day. Overall the GBP/USD traded with a low of 1.6422 and a high of 1.6548 before closing the day at 1.6455 in the New York session. Looking ahead, May PMI forecast at 54.1 vs. 54.6 previously.
The Australian Dollar (AUD) was unable to hold onto gains that the Euro surge provided and the market instead focused on the weak trade data to push the Aussie to day lows late in the US session. Q1 Current Account at -10.45bn vs. -8bn previously. Overall the AUD/USD traded with a low of 1.0641 and a high of 1.0758 before closing the day at 1.0684 in the New York session. Looking ahead, Q1 GDP forecast at -0.4% vs. 0.7% previously.
Oil & Gold (XAU) range trading as $ 1540 contained the topside again. Overall trading with a low of USD$ 1532 and high of USD $ 1541 before ending the New York session at USD$ 1535 an ounce. Oil surged resuming the uptrend. WTI Oil Closed +2.10 at $ 102.70 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro – 1.4410
Initial support at 1.4125 (May 27 low) followed by 1.4068 (May 26 low). Initial resistance is now located at 1.4423 (May 11 High) followed by 1.4455 (50% retrace of 1.4940-1.3970)
Yen – 81.40
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 – 1.6465
Initial support at 1.6268 (May 26 low) followed by 1.6132 (May 25 low). Initial resistance is now at 1.6584 (76.4% retrace of 1.6747-1.6058) followed by 1.6661 (May 3 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 1.0794 (61.8% retrace of 1.1012-1.0441) followed by 1.0877 (76.4% retrace of 1.1012-1.0441).
Gold – 1531
Initial support at 1513 (May 24 low) followed by 1504 (May 23 low). Initial resistance is now at 1543 (May 4 high) followed by 1550 (76.4% retrace of 1577.57-1462.45).
Oil – 102.90
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