• 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.

Written by Anthony Darvall

U.S. Dollar Trading (USD) mild risk aversion and heavy EUR/USD selling helped the Dollar gain against most pairs. In US stocks, DJIA -107 points closing at 10340, S&P -12 points closing at 1091 and NASDAQ -24 points closing at 2208. Looking ahead, July Consumer Credit is forecast to fall -3.8bn vs. -1.3bn previously.

The Euro (EUR) 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.

The Japanese Yen (JPY) USD/JPY slipped below Y84 on heavy crosses led by the EUR/JPY but the moves were not drastic and support was found at Y83.50. The BOJ held at 0.1% but given it was the second meeting in two weeks the market was not expecting fireworks. Overall the USDJPY traded with a low of 83.50 and a high of 84.28 before closing the day around 83.75 in the New York session. UPDATE July Machine Orders at 8.8%.

The Sterling (GBP) was weaker against the greenback but made good gains against the souring Euro. Cable Found support at 1.5300 and bounced in the US session. Overall the GBP/USD traded with a low of 1.5294 and a high of 1.5427 before closing the day at 1.5360 in the New York session. Looking ahead, July Industrial Output is forecast at 0.3% vs. -0.5% previously m/m.

The Australian Dollar (AUD) was pushed lower on neutral comments from the RBA after they held at 4.5% and news emerged that Labor would be forming a new government along with its proposed mining tax. Overall the AUD/USD traded with a low of 0.9090 and a high of 0.9181 before closing the US session at 0.9120.

Oil & Gold (XAU) gold surged in the US to test $1260 on global financial concerns. Overall trading with a low of USD$1244 and high of USD $1260 before ending the New York session at USD$1256 an ounce. Oil held up well in a risk averse environment. WTI Oil Closed -$0.30 at $73.80 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2685

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen – 83.70

Initial support is located at 83.52 (Sept 7 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.23 (Sept 3 high) followed by 86.36 (Aug 13 high).

Pound – 1.5365

Initial support at 1.5125 (July 21 low) followed by 1.4906 (0.618 of 1.4231 – 1.5999). Initial resistance is now at 1.5492 (Sept 1 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.9115

Initial support at 0.9055 (Sept 2 low) followed by the 0.8771 (Aug 25 low). Initial resistance is now at 0.9222 (Aug 6 high) followed by 0.9389 (Apr 12 high).

Gold – 1256

Initial support at 1232 (Aug 31 low) followed by 1210 (Aug 24 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (round number).

Oil – 73.70

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

• The US Dollar Traded thinly against most pairs in a range bound fashion as the US market was closed for Labor Day Holiday. The USD remained near post Nonfarm lows though as Asian and European stocks rallied. Looking ahead we have Europe’s August Employment Trends previously 97.

  The Euro yesterday stalled above 1.2900 in Europe buoyed by strong stocks before profit taking inspired a pull back. September Sentix Index slipped 7.6 vs. 8.5 previously. As the session went on a Wall Street Journal article was released claiming that some European banks did not reveal the true extent of their sovereign holdings during the stress test results. This renewed concern over European Banking capital has weighed on the Euro which got hammered back down to 1.2788. EUR/USD traded with a low of 1.2788 and a high of 1.2920 before closing at 1.2810. Looking ahead, July German Industrial Orders are forecast 0.5% vs. 3.2%.                                                  

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.2850 with a preference to enter into Short positions at 1.2840
• § The USDJPY pivot point is at 84.40 with a preference to enter Short positions at 84.35               

Today’s calendar and market movers:

• § German Industrial Orders for the month of July is forecasted at 0.5%
• § United States Employment Trend for August, prior months reading was 97 

Equity Markets: 

• US equities closed negative yesterday with the S&P500 at -0.04% and the DJIA at -0.05%. The European bourses were positive with the FTSE up 0.20% the DAX and the CAC closing at 0.33% and 0.34% respectively. The NIKKEI and the HSI at the time of writing is -0.73% and 0.01% respectively.

Written by Anthony Darvall

U.S. Dollar Trading (USD) most pairs were range bound as US was way for Labor Day Holiday. The USD remained near post Nonfarm lows though as Asian and European stocks rallied. Looking ahead, August Employment Trend previously 97.

The Euro (EUR) the market stalled above 1.2900 in Europe buoyed by strong stocks before profit taking inspired a pull back. September Sentix Index slipped 7.6 vs. 8.5 previously. Some focus on European Banking capital concerns could weigh this week. EUR/USD traded with a low of 1.2798 and a high of 1.2920 before closing at 1.2810. Looking ahead, July German Industrial Orders are forecast 0.5% vs. 3.2%.

The Japanese Yen (JPY) kept inside a tight range as the Crosses dragged the USD/JPY higher before the major tested Y84 in the European session. Overall the USDJPY traded with a low of 84.04 and a high of 84.50 before closing the day around 84.20 in the New York session. Looking ahead, BOJ Rate Announcement widely expected to be held at 0.1%.

The Sterling (GBP) was the weakest currency in the market pushing down below 1.5400 in the European session on weak crosses as EUR/GBP pushed higher. Overall the GBP/USD traded with a low of 1.5345 and a high of 1.5492 before closing the day at 1.5395 in the New York session. Update August BRC Retail Sales at 1% vs. 0.5%.

The Australian Dollar (AUD) held close to the 0.9180 resistance all day on solid risk appetite and hopes that the political deadlock was going to solved. The RBA decision although widely expected to remain at 4.5% attention will be on the accompanying statement. Overall the AUD/USD traded with a low of 0.9040 and a high of 0.9183 before closing the US session at 0.9160. Looking ahead, RBA Decision forecat to remain at 4.5%.

Oil & Gold (XAU) with little catalyst the market stay in a $4 range next to the $1250 level. Overall trading with a low of USD$1247 and high of USD $1251 before ending the New York session at USD$1250 an ounce. Oil fell back as seller’s reemerged. WTI Oil Closed -$0.52 at $74.10 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2815

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen – 84.20

Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.23 (Sept 3 high) followed by 86.36 (Aug 13 high).

Pound – 1.5380

Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5492 (Sept 1 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.9160

Initial support at 0.9055 (Sept 2 low) followed by the 0.8771 (Aug 25 low). Initial resistance is now at 0.9222 (Aug 6 high) followed by 0.9389 (Apr 12 high).

Gold – 1249

Initial support at 1232 (Aug 31 low) followed by 1210 (Aug 24 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (round number).

Oil – 74.10

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

• The US Dollar Traded weaker against most majors and stronger against the yen as better than expected albeit still negative August Job Numbers helped inspire further US stock market gains and create a risk on environment. The USD fared weaker across the board with the Euro and Aussie leading the majors higher. The better than expected NFP report however weakness the case of further Quantitative easing by the Fed which may actually result in a stronger Dollar that is if a string of positive data start hitting the wires. August Non Farm Payrolls -54k vs. -100k forecast. The August Unemployment Rate increased to 9.6% vs. 9.5% previously. In US stocks, DJIA +127 points closing at 10447, S&P +14 points closing at 1104 and NASDAQ +33 points closing at 2233. Looking ahead, US Bank Holiday Today.

  The Euro the Euro rallied to week highs as stocks traded higher and mixed US data encouraged Dollar sales. We saw the immediate USD strength following better than expected NFP reverse by heavy EUR/JPY buying. August US ISM services came out weaker at 51.5 vs. 54.3 forecasts which helped the Euro’s gains extended to test 1.2900. EUR/USD traded with a low of 1.2810 and a high of 1.2897 before closing at 1.2891. Looking ahead, September Sentix Index forecast at 8 vs. 8.5 previously.  

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.2850 with a preference to enter into Long positions at 1.2860
• § The USDJPY pivot point is at 84.15 with a preference to enter Short positions at 84.20               

Today’s calendar and market movers:

• § Euro Zone Sentix Index for September forecasted at 8
• § United Kingdom Retail Sales for August is out prior months reading was 0.5%
• § Australia Reserve Bank Rate Decision for September forecasted at 4.5% 

Equity Markets: 

• US equities closed positive on Friday with the S&P500 at 1.32% and the DJIA at 1.24%. The European bourses were positive with the FTSE up 1.06% the DAX and the CAC closing at 0.83% and 1.12% respectively. The NIKKEI and the HSI at the time of writing is 2.05% and 1.32% respectively.

Last week’s currency trading review

The Dollar a big data week saw important figures come in positive and allowed a major rally in US stock markets. The positive environment encouraged investors to sell Dollars for higher risk assets and currencies. August ISM Manufacturing came in at 56.3 vs. 53.2 forecast and August Non Farm Payrolls beat expectations at -54k vs. -100k forecast. The Euro had a good week building on previous momentum to take another leg higher. The highlight of the week was the ECB announcement where although they held at 1.0%, the supporting commentary was very positive. German July Retail Sales fell -0.3% vs. 0.6% forecast. EUR/GBP was buoyant as the Pound underperformed. The EUR/USD gained +1.04% closing at 1.2895, after opening the week at 1.2761.

The Japanese Yen the market tried to rally in the USD/JPY but each attempt was sold off with the market disappointed that the BOJ’s emergency meeting failed to address the Yen strength. Friday ’s US jobs figures allowed another test of Y85 but this was quickly repelled. GBP/JPY tested fresh monthly lows under Y129 before rebounding.  The USD/JPY fell -1.09% closing at 84.28 vs. 85.20 previously. The GBP sentiment towards the Pound has turned very cautious with economic data weaker than expected. Manufacturing PMI dropped to 54.3 from 56.9 and Services PMI slipped to 51.3 vs. 53.1 previously. The GBP/USD fell -0.49% closing at 1.5450 after opening at 1.5526. The AUD was buoyed higher on the stronger risk environment and great economic data. July Retail Sales were at 0.7% vs. 0.4% m/m previously. Q2 GDP also beat expectations at 1.2% vs. 0.9% forecast Q/Q. 0.9000 provided little resistance on Monday and 0.9180 was tested by Friday. The AUD/USD gained +1.92% closing at 0.9164 after opening at 0.8988.

The Forex Trading Week Preview

In the States; On Wednesday, July Consumer Credit forecast at 5.4bn vs. -1.3bn previously. Weekly Jobless Claims forecast at 470k vs. 472k previously. Also released, July Trade Balance -47.8bn vs. -49.9bn previously. On Friday, Canadian August Employment Change is forecast at 22.8k vs. -9.3k previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday, German July Forecast at 0.6% vs. 3.2% previously m/m. On Wednesday, German July Trade Balance forecast at 13.0bn vs. 14.1bn previously. On Friday, German August Final forecast 1.0% y/y. In the UK, On Wednesday Industrial Production forecast at 0.4% vs. -0.5%.  On Thursday, BOE Rate Annoucement forecast to hold at 0.5%. Also released July Trade Balance is forecast at -7.6bn vs. -7.4bn previously. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Tuesday, BOJ Rate Announcement is forecast at 0.1% with no change from last week’s emergency meeting. In Australia; On Tuesday, RBA Rate Announcement is forecast to remain at 4.5%. On Thursday, August Unemployment is forecast at 5.2% vs. 5.3% previously with an Employment change 25k vs. 23.5k. We will provide our previews and reviews of these data releases in the daily summary.

TECHNICAL COMMENTARY

Euro – 1.2885

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen – 84.45

Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.23 (Sept 3 high) followed by 86.36 (Aug 13 high).

Pound – 1.5450

Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5492 (Sept 1 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.9145

Initial support at 0.8771 (Aug 25 low) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9176 (Sept 3 high) followed by 0.9222 (Aug 6 high).

Gold – 1248

Initial support at 1232 (Aug 31 low) followed by 1210 (Aug 24 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (round number).

Oil – 74.35

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

Written by Anthony Darvall

U.S. Dollar Trading (USD) better than expected albeit still negative August Job Numbers helped inspire further US stockmarket gains and create a risk on environment. The USD fared badly across the board with the Euro and Aussie leading the majors higher. August NonFarm Payrolls -54k vs. -100k forecast. The August Unemployment Rate increased to 9.6% vs. 9.5% previously. In US stocks, DJIA +127 points closing at 10447, S&P +14 points closing at 1104 and NASDAQ +33 points closing at 2233. Looking ahead, US Bank Holiday Today.

The Euro (EUR) the Euro rallied to week highs as stocks moved higher and mixed US data encouraged Dollar sales. Immediate USD strength after better than expected Nonfarm’s was reversed by heavy EUR/JPY buying. When August US ISM services came out weaker at 51.5 vs. 54.3 forecast the Euro’s rally extended to test 1.2900. EUR/USD traded with a low of 1.2810 and a high of 1.2897 before closing at 1.2891. Looking ahead, September Sentix Index forecast at 8 vs. 8.5 previously.

The Japanese Yen (JPY) USD/JPY rallied immediately above Y85 after the Nonfarm Payrolls but was unable to maintain above the Key level as the ISM data disappointed and general USD selling pushed the major back to the lower Y84 level. The market is still watching comments from Japanese Officials about the recent Yen strength and any moves to fight this. Overall the USDJPY traded with a low of 84.18 and a high of 85.22 before closing the day around 84.40 in the New York session.

The Sterling (GBP) continued to underperform the rest of the market as economic data suggests a fragile recovery. August PMI Service dropped to 51.3 vs. 53.1 previously. Dollar weakness inspired on a timid rally but was capped above 1.5460. Overall the GBP/USD traded with a low of 1.5391 and a high of 1.5466 before closing the day at 1.5456 in the New York session. Look Ahead, BRC Retail Sales Monitor August previously at 0.5%.

The Australian Dollar (AUD) the risk sensitive currency tracked stock markets higher, trading at multimonth highs near key 0.9180. AUD/JPY test Y78 briefly but when the USD/JPY slumped the pair fell back to lower Y77 region. Overall the AUD/USD traded with a low of 0.9068 and a high of 0.9175 before closing the US session at 0.9165.

Oil & Gold (XAU) fell back after the US jobs data as the safe haven precious metal suffered from profit taking. Overall trading with a low of USD$1238 and high of USD $1253 before ending the New York session at USD$1247 an ounce. Fell back from the $75 level on weak US services data. WTI Oil Closed -$0.42 at $74.60 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2885

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen – 84.45

Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 85.23 (Sept 3 high) followed by 86.36 (Aug 13 high).

Pound – 1.5450

Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5492 (Sept 1 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.9145

Initial support at 0.8771 (Aug 25 low) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9176 (Sept 3 high) followed by 0.9222 (Aug 6 high).

Gold – 1248

Initial support at 1232 (Aug 31 low) followed by 1210 (Aug 24 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (round number).

Oil – 74.35

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

• The Dollar Traded mixed as the market is reluctant to put any more directionally risky trades ahead of Non Farm Payrolls today. The market did trade with a positive tone however as US stocks extended Wednesday’s gains and dips where bought on risk appetite. This was on the back of weekly Jobless Claims which fell to 472k vs. 475k forecast and US Pending Home Sales increased 5.2% in July. The DJIA traded +50 points higher closing at 10320 and the S&P traded +9 points higher closing at 1090. USDJPY price action on the day was between 83.99- 84.55. Looking ahead, August US Nonfarm Payrolls are forecast at -100k vs. -131k. August Unemployment Rate is forecast at 9.6% vs. 9.5% previously.

  The Euro traded mixed to stronger against most majors as the ECB held at 1.0% as widely expected and President Trichet was positive in the press conference afterwards. Q2 GDP was also confirmed at 1.0% allowing the EUR/USD to consolidate above 1.2800. EUR/USD traded with a low of 1.2775 and a high of 1.2880 before closing at 1.2820. Looking ahead, July Retail Sales are forecast 0.2% vs. 0.0%.                                                  

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.2785 with a preference to enter into Long positions at 1.2795
• § The USDJPY pivot point is at 84.40 with a preference to enter Short positions at 84.35               

Today’s calendar and market movers:

• § Switzerland Consumer Price Index for August is forecasted at 0.4%
• § United Kingdom PMI Services for August expected at 52.9
• § Euro Zone Retail Sales for July is expected at 0.2%
• § United States Non Farm Payrolls for August is expected at -100K 

Equity Markets: 

• US equities closed positive yesterday with the S&P500 at 0.91% and the DJIA at 0.49%. The European bourses were positive with the FTSE up 0.09% the DAX and the CAC closing at 0.00% and 0.21% respectively. The NIKKEI and the HSI at the time of writing is 0.57% and 0.06% respectively.

Written by Anthony Darvall

U.S. Dollar Trading (USD) the positive momentum continued overnight with stocks extending Wednesday’s gains and dips being bought on risk appetite. Weekly Jobless Claims fell to 472k vs. 475k forecast and US Pending Home Sales increased 5.2% in July. In US stocks, DJIA +50 points closing at 10320, S&P +9 points closing at 1090 and NASDAQ +23 points closing at 2200. Looking ahead, August US Nonfarm Payrolls are forecast at -100k vs. -131k. August Unemployment Rate is forecast at 9.6% vs. 9.5% previously.

The Euro (EUR) the ECB held at 1.0% as widely expected and President Trichet was positive in the press conference afterwards. Q2 GDP was also confirmed at 1.0% allowing the EUR/USD to consolidate above 1.2800. EUR/USD traded with a low of 1.2775 and a high of 1.2880 before closing at 1.2820. Looking ahead, July Retail Sales are forecast 0.2% vs. 0.0%.

The Japanese Yen (JPY) was extremely quiet inside a 50 pip range with the pair finding support at Y84.00. The AUD/JPY is supporting grinding higher towards Y77 ahead of the Yen critical US jobs reports tonight. Overall the USDJPY traded with a low of 83.98 and a high of 84.58 before closing the day around 84.40 in the New York session.

The Sterling (GBP) was under slight pressure in Europe unable to take advantage of the improvement in risk appetite. August Nationwide House Price Index fell -0.9% m/m and has increased economists worried about a double dip recession. Overall the GBP/USD traded with a low of 1.5348 and a high of 1.5454 before closing the day at 1.5420 in the New York session. Looking ahead, August PMI services are forecast at 52.9 vs. 53.1 previously.

The Australian Dollar (AUD) the commodity based currency took advantage of moves higher in Oil and stocks to break above 0.9100. July Trade Balance fell unexpectedly to 1.8bn vs. 3.4bn forecast. Overall the AUD/USD traded with a low of 0.9053 and a high of 0.9123 before closing the US session at 0.9100.

Oil & Gold (XAU) range traded around the $1250 figure. Overall trading with a low of USD$1244 and high of USD $1253 before ending the New York session at USD$1250 an ounce. Crude Oil jumped on news of an Oil Rig explosion. WTI Oil Closed +$1.11 at $75.00 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2830

Initial support at 1.2588 (Aug 24 low) followed by 1.2434 (61.8% retrace of 1.1877-1.3334). Initial resistance is now located at 1.2933 (Aug 12 low) followed by 1.3000 (Big figure Resistance)

Yen – 84.35

Initial support is located at 83.60 (August 24 low) followed by 81.85 (May 1995 low). Initial resistance is now at 86.38 (August 13 high) followed by 87.15 (38.2% retrace of 92.89-83.60).

Pound – 1.5425

Initial support at 1.5324 (38.2% retrace of 1.4231-1.5999) followed by 1.5125 (July 21 low). Initial resistance is now at 1.5475 (Aug 31 high) followed by 1.5713 (Aug 12 high).

Australian Dollar – 0.9110

Initial support at 0.8771 (Aug 25 low) followed by the 0.8634 (July 19 low). Initial resistance is now at 0.9117 (Sept 2 high) followed by 0.9222 (Aug 6 high).

Gold – 1250

Initial support at 1232 (Aug 31 low) followed by 1210 (Aug 24 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (round number).

Oil – 74.80

Initial support at 72.50 (Intraday Support) followed by 71.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 76.00 (Intraday Resistance).

• The Dollar Traded strong as Chinese manufacturing data sent stocks higher in Asia and Europe and this accelerated in the US session on better than expected August ISM data at 56.3 vs. 55.5 previously. We also released August ADP Employment at -10k vs. +19k forecast. In US stocks the DJIA traded +254 points higher closing at 10254 and the S&P traded +30 points higher closing at 1080. Looking ahead, Weekly Jobless Claims are forecast at 475k vs. 473k previously. Also tonight, Fed Chief Bernanke speaks. USDJPY price action yesterday was between 83.67 – 84.65

  The Euro traded strong as risk appetite pushed the single currency back above 1.2800 and the topside is now in focus after support was found in the last 2 weeks above 1.2500. July German Retail Sales are missed at -0.3% vs. 0.5% previously. EURUSD traded with a low of 1.2662 and a high of 1.2857 before closing at 1.2800. Looking ahead, Q2 GDP is forecast at 1.0% q/q. Also released, ECB rate announcement is forecast at 1.0%. 

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.2690 with a preference to enter into Long positions at 1.2690
• § The USDJPY pivot point is at 84.10 with a preference to enter Long positions at 84.45               

Today’s calendar and market movers:

• § United Kingdom Nationwide House Price for the month of Aug is forecasted to be -0.2%
• § Euro Zone GDP for Q2 is expected at 1%
• § Euro Zone Rate Announcement for September is expected to remain unchanged at 1%
• § United States Jobless claims for the week is expected at 475K
• § United States Pending Home Sales for July is expected to drop by -1% 

Equity Markets: 

• US equities closed positive yesterday with the S&P500 at 2.95% and the DJIA at 2.54%. The European bourses were positive with the FTSE up 2.56% the DAX and the CAC closing at 2.52% and 3.65% respectively. The NIKKEI and the HSI at the time of writing is 1.54% and 1.27% respectively.