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.

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CURRENCY TRADING SUMMARY – 8th September (00:30 GMT)

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).

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Euro slides on renewed EU Bank Capital concerns! 

• 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.

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CURRENCY TRADING SUMMARY – 7th September (00:30 GMT)

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).

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Better than expected Non Farms spark risk rallies! 

• 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.

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