Euro steadied ahead of the EU summit

• The dollar paused its rally on Thursday as US Treasury prices edged higher. On Wednesday, the US dollar rose against a basket of currencies supported by rising US Treasury yields. Jobless Claims and Manufacturing index are expected later today.
• The euro appears steadied on Thursday’s European trade after it plummeted on Wednesday weighed by rating agency Moody’s which said it was considering downgrading Spain’s sovereign debt. EU leaders are discussing a persistent debt crisis and possible methods to prevent a euro zone debt contagion in an end of year meeting on Thursday and Friday. The single currency is trading in a tight range between 1.3200-1.3233 versus the dollar well below a three week high of 1.3497 hit on Tuesday. The pair is currently trading at 1.3233 dollars.
• Higher US Treasury yields pushed the dollar up to three-month highs versus the Japanese Yen on Wednesday hitting 84.50. USD/JPY is now trading at 84.22 yen. The Swiss franc fell on Thursday ahead of Switzerland’s interest rate decision.

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.3275 with a preference to enter into Short positions at 1.3265
• § The USDJPY pivot point is at 83.90 with a preference to enter Long positions at 83.95

Today’s calendar and market movers:

• § Switzerland’s Interest Rate decision
• § UK Retail Sales in November is forecasted at 0.5%
• § US Initial Jobless Claims is forecasted at 425K
• § US Fed Manufacturing Index for December is forecasted at 14.1

Equity Markets:

US equities closed down on Wednesday with the S&P500 at -0.51% and the DJIA down at -0.17%. The European bourses traded down as well with the FTSE traded down -0.51% the DAX and the CAC down at -0.16% and -0.58% respectively. The NIKKEI and the HSI at the time of writing is trading at 0.01% and -0.58% respectively.

Source: Easy Forex

Recommended Forex Brokers: AvaFX and Forex Yard

Renewed EU Bank Capital concerns spook markets!

• The US Dollar traded more with a risk aversion tone and weighed on the EUR/USD the Dollar gained against most pairs except however against the Japanese Yen and the Swiss Franc. The aversion followed through from a Wall Street Journal article which stipulates that EU banks understated there sovereign debt holding ahead of the stress tests. In US stocks the DJIA closed -107 points at 10340 and the S&P closed -12 points at 1091. Looking ahead, July Consumer Credit is forecast to fall -3.8bn vs. -1.3bn previously.The Euro came under pressure for most of the day with the market focused on a WSJ article that questioned the European Banking Stress tests and also the German Banking Association reported that German Banks would need 100bnin more capital if new global banking rules get passed. EUR/USD traded with a low of 1.2675 and a high of 1.2821 before closing at 1.2690. Looking ahead, German Trade Balance forecast at 12.9bn vs. 12.3 bn.

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.2740 with a preference to enter into Short positions at 1.2730
• § The USDJPY pivot point is at 83.85 with a preference to enter Short positions at 83.80

Today’s calendar and market movers:

• § United Kingdom Halifax House Prices for Aug, previous month gained 0.6%
• § United Kingdom Manufacturing Production for July expected at 0.3%
• § United States Consumer Credit for July expected at -3.8 bio

Equity Markets:

• US equities closed negative yesterday with the S&P500 at -1.15% and the DJIA at -1.03%. The European bourses were negative with the FTSE down -0.58% the DAX and the CAC closing at -0.60% and -1.11% respectively. The NIKKEI and the HSI at the time of writing is -2.18% and -1.43% respectively.

Source: Easy Forex

Recommended Forex Brokers: AvaFX and Forex Yard

Last week’s currency trading review

The Dollar was on the backfoot for most of the week as stock markets staged an impressive rebound. Heavily overbought, the USD was ripe for profit taking and the market did so in a broad based fashion. April’s Trade Balance was -40.3bn vs. -40.8bn forecast and US Retail Sales Slumped -1.2% vs. 0.2% forecast for the first negative reading in 8 months. On a Positive note, UoM Consumer Confidence soared to a 2 year high at 75.5 in June. The Euro was bought up quite aggressively on comments from the head of the Chinese pension Fund that the Euro will survive the crisis and that the he was more concerned about their US debt holdings. Also helping sentiment towards the single currency was the improvement in the ECB’s GDP outlook and positive comments from President Trichet after the ECB Rate Meeting where they at 1.0%. The EUR/USD gained +1.19% closing at 1.2119, after opening the week at 1.1967.

The Japanese Yen lost ground against most currencies but stayed in a range against the USD as the two safe haven currencies competed for the weakest performance of the week. AUD/JPY soared in the ‘risk on’ environment up over 3Yen and EUR/JPY also did very well reclaiming the Y110 level after testing support at 108 in recent weeks. Q1 GDP was confirmed at 1.2% Q/Q. The USD/JPY fell -0.29% closing at 91.63, after opening at 91.90 previously. The GBP made small gains but underperformed as heavy EUR/GBP buying on Friday hurt the Pound going into the weekend. The market is paying close attention to the new government’s fiscal outlook and the coming budget will by closely scrutinized. The GBP/USD gained +0.66% closing at 1.4548 after opening at 1.4452. The AUD was the best performing currency in the market as the fundamentals of the commodity based economy continued to outshine the rest of the market and it was only risk aversion keeping the Aussie at lower levels. With the rebound in stocks the market covered shorts quickly testing 0.8500 into the weekend. May Employment change was very strong at 26k vs. 20k forecast and the Unemployment rate dropped to 5.2% vs. 5.4% previously. The AUD/USD gained +3.18% closing at 0.8501 after opening at 0.8231.

The forex trading week preview

In the States; On Tuesday, Net Long Term TIC Flows previously at 140.5bn. On Wednesday, May Housing Starts are forecast at 650k vs. 672k previously. Also released, May Industrial Production forecast at 0.9% vs. 0.8% previously. Also Fed Chief Bernanke speaks. On Thursday, Weekly Jobless Claims are forecast at 453k vs. 456k previously. Also released, June Philly Fed forecast at 21 vs. 21.4 previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday, German ZEW Survey forecast at 42 vs. 45.8 previously. On Wednesday, May CPI is forecast at 0.8% y/y. On Thursday, ECB Monthly Report Released. In the UK; On Tuesday, May CPI is forecast at 3.5% vs. 3.7% previously y/y. On Thursday, May Core Retail Sales forecast at 0.4% vs. 0.1% previously. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Tuesday, BoJ Target Rate is forecast unchanged at 0.1%. On Friday, BoJ Monetary Policy Minutes. In Australia; On Tuesday, June RBA Minutes Released. We will provide our previews and reviews of these data releases in the daily summary.

TECHNICAL COMMENTARY

Currency	Sup 2	Sup 1	Spot	Res 1	Res 2
EUR/USD	1.1881	1.2103	1.2220	1.2327	1.2453
USD/JPY	90.54	91.24	91.60	92.97	93.64
GBP/USD	1.4347	1.4505	1.4740	1.4809	1.4918
AUD/USD	0.8263	0.8427	0.8590	0.8728	0.8865
XAU/USD	1197.00	1211	1223	1252	1261.00
OIL/USD	70.00	72.50	74.80	75.00	76.00

Euro – 1.2220

Initial support at 1.2103 (June 14 low) followed by 1.1881 (June 7 low). Initial resistance is now located at 1.2327 (June 3 high) followed by 1.2453 (May 28 high)

Yen – 91.60

Initial support is located at 91.24 (June 11 low) followed by 90.54 (June 1 low). Initial resistance is now at 92.97 (May 18 high) followed by 93.64 (May 13 high).

Pound – 1.4740

Initial support at 1.4505 (Jun 11 low) followed by 1.4347 (Jun 8 low). Initial resistance is now at 1.4809 (June 14 high) followed by 1.4918 (May 12 high).

Australian Dollar – 0.8590

Initial support at 0.8427 (June 11 low) followed by the 0.8263 (June 10 low). Initial resistance is now at 0. 8728 (0.505 retrace of 0.9388 – 0.8068) followed by 0.8865 (May 17 high).

Gold – 1223

Initial support at 1211 (June 7 low) followed by 1197 (June 4 low). Initial resistance is now at 1252 (Jun 8 high) followed by 1261 (1123.90 plus 1.618 of 1085.3-1170.1).

Oil – 74.80

Initial support at 72.50 (Intraday Support) followed by 70.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

Source: Easy Forex

Recommended Forex Brokers: AvaFX and Forex Yard