Daily outlook - 26th July 2012 (00:30GMT)

Anthony Darvall

CURRENCY TRADING SUMMARY 26th July 2012

Written by Anthony Darvall

U.S. Dollar (USD)

U.S. Dollar Trading (USD) stocks around the world enjoyed a solid relief rally overnight and EUR/USD sellers booked profit on short trades leading to USD weakness across the board. Weak June Home Sales at 350k vs. 369k previously added to mounting speculation the FED will move sooner than later to help the US economy. Looking ahead, Weekly Jobless Claims forecast at 380k vs. 386k previously. Also June Durable Goods Orders forecast at 0.4% vs. 1.3% previously. 

 

Euro (EUR)

The Euro (EUR) the EUR/USD shot higher as Nowonty suggested the ESM (the Eurozone Bailout Fund recently agreed upon to save Spain) should be given a Banking license. This would open the fund up to loans from the ECB but is controversial because this would be akin to monetizing the EU Government Debt. The German response to Nowotny suggestion should be interesting.

Japanese Yen (JPY)

The Japanese Yen (JPY) the USD/JPY is under continuous pressure from USD weakness on QE3 expectations and from EUR/JPY weakness when negative Eurozone news emerged. The Y78 level is holding for now but overnight we heard from the BOJ Yamaguchi that intervention isn’t imminent and this could weigh if more aggressive attempts are made to break the key support.

Australian Dollar (AUD)

Australian Dollar (AUD) the AUD/USD reversed as aggressively from the start of Asia where support was found at 1.0180 after CPI came in slightly weaker than expected at 0.5% vs. 0.6% forecast Q/Q. The EUR/USD and subsequent US stock market rally helped extend the rebound into a full blown risk rally and we saw a move above 1.0300 and then on to fresh week highs above 1.0330. The outlook is mixed with the Eurozone crisis still capable of pulling the AUD lower but the commodity currency remains well supported on the dip. 

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2000

1.2035

1.2135

1.2180

1.2215

USD/JPY

77.60

77.90

78.15

78.45

78.80

GBP/USD

1.5410

1.5445

1.5480

1.5550

1.5630

AUD/USD

1.0180

1.0250

1.0315

1.0365

1.0430

XAU/USD

1557.00

1564

1604

1598

1604

OIL/USD

85.00

 

87.00

88.40

89.00

90.00

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