CURRENCY TRADING SUMMARY – 3rd June 2008 (00:30GMT)
U.S. Dollar Trading (USD) the market was seemingly unimpressed by the better than forecasted ISM manufacturing numbers out yesterday at 49.6 vs. 48.5 expected. Although the immediate reaction was positive the gains could not be held during the New York session as the share market fell and the chairman of ISM manufacturing survey Norbert j. Ore stated ‘exports continue to be strong due to the weak dollar—without the weak dollar the story would be much more negative’. In US share markets the NASDAQ was down 31.13 (1.23%) and the Dow Jones was down 134.50 points (1.06%). Crude Oil closed up $0.38 ending the New York session at $127.73 per barrel. Looking ahead, Factory orders are out today expected to be flat. Speakers today at the International Monetary Conference include ECB’s President Trichet, BOJ Governer Shirakawa and Fed Chairman Bernanke.
The Euro (EURO) traded at daily lows after the stronger the expected US data but rallied as commodities rallied. A rise in risk aversion kept the JPY and CHF crosses under pressure. Overall the EUR/USD traded with a low of 1.5488 and a high of 1.5570 before closing the day at 1.5555 in the New York session. Looking ahead, April Eurozone PPI and Revised 1st quarter GDP out today.
The Japanese Yen (JPY) made solid gains yesterday as risk aversion returns on UK banking fears and European and US equities tumbled. USDJPY traded with a low of 104.02 and a high of 105.52 before closing the day around 104.39 in the New York session. Looking ahead, May Japanese Monetary Base is out today.
The Sterling (GBP) gapped lower Monday morning on weekend reports that a Large UK lender Bradford and Bingley will issue a profit warning and its Chief executive will resign. The selling pressure continued in the European session with the GPB/JPY under the most strain. Economic Data out yesterday did little to help the situation with PMI manufacturing weaker at 50.0 vs. 51.0 expected. Overall the GBP/USD traded with a low of 1.9598 and a high of 1.9774 before closing the day at 1.9655 in the New York session. Looking ahead, Halifax House Price Index (tentative) and Construction PMI out today.
The Australian Dollar (AUD) was weighed down after much weaker then expected April Retail sales at -0.2% vs. 0.2% forecasted but performed well in the US session as commodities rebounded. AUDJPY was under pressure breaking back under the Key 100 level. Overall the AUDUSD traded with a low of 0.9498 and a high of 0.9571 before closing the day at 0.9555 in the New York session. Looking Ahead, RBA Interest Rate statement out today along with April Building Approvals.
Gold (XAU) gained as bargain hunters moved in after last weeks drop. Overall trading with a low of $881.60 and high of $897.35 ending the New York session at $891 an ounce.
TECHNICAL COMMENTARY
Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
1.5410 | 1.5462 | 1.5545 | 1.5589 | 1.5669 | |
103.89 | 104.02 | 104.50 | 105.54 | 105.88 | |
1.9555 | 1.9597 | 1.9660 | 1.9816 | 1.9852 | |
0.9430 | 0.9503 | 0.9555 | 0.9581 | 0.9639 | |
860.50 | 871.25 | 891.00 | 909.85 | 930.90 |
Euro – 1.5545
Initial support at 1.5462 (May 30 low) followed by 1.5410 (May 6 resistance). Initial resistance is now located 1.5589 (Jun 2 High) at followed by 1.5669 (May 29 high).
Yen – 104.50
Initial support is located at 104.02 (June 2 low) followed by 103.89 (May 28 low). Initial resistance is now at 105.54 (June 2 high) followed by 105.88 (May 29 high).
Pound – 1.9660
Initial support at 1.95967 (Jun 2 low) followed by 1.9555 (61.8% retracement 1.9363 to 1.9852). Initial resistance is now at 1.9816 (June 2 high) followed by 1.9852 (May 23 high)
Australian Dollar – 0.9555
Initial support a 0.9503 (June 2 low) followed by 0.9430 (61.8% retracement 0.9291 to 0.9655). Initial resistance is now at 0.9581 (May 30 high) followed by 0.9639 (May 29 high).
Gold – 891
Initial support at 871.25 (May 30 low) followed by 860.5 (May 14 low). Initial resistance is now at 909.85 (May 28 high) followed by 930.9 (May 27 high).