CURRENCY TRADING SUMMARY
U.S. Dollar Trading (USD) gained yesterday as the US Core Durable Goods orders for April came in very strong with a surprising increase of 2.5% vs. -0.5% as expected. Also surprising was the Core Capital Goods number which bounced to 4.2% after 3 months of declines. In US share markets the NASDAQ was up 5.46 points (.22%) and the Dow Jones was up 45.68 points (..36%). Sharp loses early in the European session saw Crude Oil futures trade down towards $126 per barrel before more threats from Nigerian militants caused a strong rally on supply concerns. Crude Oil closed up $2.16 ending the New York session at $130.80 per barrel. Looking ahead, preliminary US GDP for the first quarter is out today.
The Euro (EURO) strong German CPI figures of 0.6% month on month showed inflation was a major problem for Euro-zone’s biggest economy, but the market focused more on the early loses in Crude Oil and Gold pushing the Euro down to multi day lows. A rally in Crude towards the day end was offset by the strong US data. Overall the EUR/USD traded with a low of 1.5608 and a high of 1.5761 before closing the day at 1.5640 in the New York session. Looking ahead, German unemployment comes out today expecting a change of -25K.
The Japanese Yen (JPY) was sold heavily today lead by the USDJPY which reclaimed the 105 level briefly after strong data out of the US. The EURJPY also briefly traded above the key 164 level during the day. USDJPY traded with a low of 103.89 and a high of 105.32 before closing the day around 104.70 in the New York session. Look ahead, Japanese April Retail sales out today with the markets forecasting 0.5% year on year. UPDATE: April Retail Sales 0.1% Y/Y.
The Sterling (GBP) tracked the euro lower against the strong dollar early in Europe, the pound rebounded on heavy cross buying particularly against the Euro and JPY. Overall the GBP/USD traded with a low of 1.9704 and a high of 1.9828 before closing the day at 1.9810 in the New York session. Looking ahead, Nationwide House Prices out today expected to come in at -0.5%.
The Australian Dollar (AUD) performed strongly overnight as bond yields were focused on and risk appetite stepped up a notch. AUDJPY was very bid, breaking the key 100 level and closing above it. Overall the AUDUSD traded with a low of 0.9562 and a high of 0.9629 before closing the day at 0.9620 in the New York session. Looking ahead, New Capital Expenditure out today forecasted to come in at 3.1%.
Gold (XAU) fell heavily in early European trading inline with Crude Oil losses, but rebounded strongly reclaiming the $900 level. Overall trading with a low of $889 and high of $910 ending the New York session at $901.
TECHNICAL COMMENTARY
Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
1.5595 | 1.5609 | 1.5650 | 1.5761 | 1.5818 | |
102.58 | 103.89 | 104.70 | 105.32 | 105.44 | |
1.9614 | 1.9684 | 1.9810 | 1.9852 | 1.9870 | |
0.9511 | 0.9546 | 0.9625 | 0.9655 | 0.9723 | |
880.50 | 889.60 | 903.00 | 909.85 | 930.90 |
Euro – 1.5650
Initial support at 1.5609 (May 28 low) followed by 1.5595 (May 6 resistance). Initial resistance is now located at 1.5761 (May 28 high) followed by 1.5818 (May 27).
Yen – 104.70
Initial support is located at 103.89 (May 28 low) followed by 102.58 (May 12 low). Initial resistance is now at 105.32 (May 28 high) followed by 105.44 (May 14 high).
Pound – 1.9810
Initial support at 1.9684 (May 22 low) followed by 1.9614 (May 21 low). Initial resistance is now at 1.9852 (May 23) followed by 1.987 (76.4% retracement of 2.00027-1.9363)
Australian Dollar – 0.9625
Initial support a 0.9546 (May 22 low) followed by 0.9511 (May 19 low). Initial resistance is now at 0.9655 (May 21 trend high) followed by 0.9723 (open this week + range last week*0.618).
Gold – 903
Initial support at 889.6 (May 28 low) followed by 880.5 (May 16 low). Initial resistance is now at 909.85 (May 28 high) followed by 930.9 (May 27 high).