Dollar consolidates gains into the Weekend

U.S. Dollar Trading (USD) made new 7 month highs according to the Dollar index on the back of surprisingly strong economic data. Empire State Manufacturing rebounded into positive territory in August at 2.8 vs. expectations of -2.8 and a -4.9 reading in July. July Industrial Production also beat expectations at 0.2% vs. forecasts of 0.0%. August Preliminary Consumer sentiment was also firm at 61.7 slightly less than the 62 forecast. In the U.S. share markets, the NASDAQ was down 1 point (0.05%) and the Dow Jones was up 43 points (0.38%). Crude Oil closed down $1.24 ending the New York session at $113.77 per barrel.

The Euro (EUR) tracked lower throughout the day although markets were thin as Europe had a bank holiday on Friday. US data added pressure denying any relief rally into the weekend.   Overall the EUR/USD traded with a low of 1.4659 and a high of 1.4826 before closing the day at 1.4680 in the New York session. Looking ahead, Euro zone Trade Balance expected to be +0.5 Billion in June.

The Japanese Yen (JPY) was sold heavily against the USD breaking through resistance at 110.50 but was relatively unchanged against other currencies as continuing weakness in the majors offset. GBP/JPY was able to bounce of recent lows but EUR/JPY and AUD/JPY remained heavy.  Overall the USDJPY traded with a low of 109.63 and a high of 110.67 before closing the day around 110.50 in the New York session.  

The Sterling (GBP) bounce off support at 1.8520 trading up to 1.8680 as market was seen a little short after large waves of selling early in the week. Rightmove House Price Index down -2.3% in July. Overall the GDP/USD traded with a low of 1.8510 and a high of 1.8685 before closing the day at 1.8660 in the New York session. Looking ahead, Public holiday in UK.

The Australian Dollar (AUD) fell heavily once again after managing to recover from heavy sales and a low 0.8590 earlier in the week. Gold falling below $800 being the main catalyst. Support in the low 0.86 levels held for the time being as Oil bounced off lows and Gold stabilized.  Overall the AUD/USD traded with a low of 0.8610 and a high of 0.8707 before closing the US session at 0.8660.

Gold (XAU) broke below $800 an ounce during the Asian session and was unable to recover as US data supported the Greenback. Overall trading with a low of USD$774.90 and high of USD$805.50 before ending the New York session at USD$787 an ounce.

TECHNICAL COMMENTARY

 

Euro – 1.4685

Initial support at 1.4664 (Aug 15 low) followed by 1.4611 (Feb 18 low). Initial resistance is now located 1.4808 (Aug 15 low) at followed by 1.4981 (Aug 13 high).

Yen – 110.35

Initial support is located at 109.43 (Aug 15 low) followed by 109.04 (Aug 14 low). Initial resistance is now at 110.67 (Aug 15 high) followed by 112.15 (Jan 2 high).

Pound – 1.8640

Initial support at 1.8513 (Aug 15 low) followed by 1.8385 (Jul 25, 2006). Initial resistance is now at 1.8686 (Aug 15 high) followed by 1.8787 (Aug 14 high).

Australian Dollar – 0.8665

Initial support at 0.8593 (Aug 13 low) followed by 0.8503 (Jan 22 low). Initial resistance is now at 0.8709 (Aug 15 High) followed by 0.8797 (Aug 14 high).

Gold – 791

Initial support at 773.5 (Aug 15 low) followed by 773 (Nov 20 reaction low). Initial resistance is now at 799.5 (Aug 15 low) followed by 836.8 (Aug 14 high).