Market Reactions

Image Caption: Forex currency price chart of GBP and USD Image: Body: Weak US Housing Data stalls Dollar Advance U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) lost ground against all currencies as weakness in the US housing sector dampened speculation of Fed Rate Hikes anytime this year. US financials were under pressure again and a spike higher in Oil hurt the general stock market. US PPI for July at 1.2% was considerable higher than the 0.6% forecast but was dismissed as backwards looking and not containing the recent Oil correction. US housing data was harder to ignore as July Building Permits dropped to .94M from 1.14M in June a drop of 16.7%. Housing Starts also slumped to a 16 year low at 965K in July vs. 1066K in June. In the U.S. share markets, the NASDAQ was down 32 points (-1.35%) and the Dow Jones was down 130 points (-1.14%). Crude Oil closed up $1.66 ending the New York session at $114.53 per barrel. Looking ahead, Crude Inventories are seen rising 0.7M. European Euro The Euro (EUR) bounced off lows grinding higher as economic data surprised to the upside. German PPI was white hot at 2.0% m/m in July vs. forecasts of 0.7%. The German ZEW Index rebounded to -55.5 from -63.9 but this was tempered by the ZEW current conditions falling to -9.2. Overall the EUR/USD traded with a low of 1.4630 and a high of 1.4794 before closing the day at 1.4780 in the New York session. Japanese Yen (JPY) The Japanese Yen (JPY) a resurgence in risk aversion aided the yen to gain against the USD. Large gains in their respective majors for GBP and EUR meant the crosses were relatively unchanged after bouncing off lows of the Asian and European session. The Bank of Japan held rates at 0.5% and downgraded the economic outlook. Overall the USDJPY traded with a low of 109.55 and a high of 110.33 before closing the day around 110.70 in the New York session. Pound Sterling (GBP) The Sterling (GBP) came under pressure early in the European session as the market digest comments from hawkish BoE Member Beazley that inflation should moderate over time suggesting he did not vote for a rate hike at the last meeting. Cable followed the Euro higher as the Dollar weakened throughout the US session. Overall the GDP/USD traded with a low of 1.8538 and a high of 1.8680 before closing the day at 1.8670 in the New York session. Looking Ahead, MPC Minutes from the August rate meeting and August CBI Orders is forecast at -12 from -8 in July. Australian Dollar (AUD) The Australian Dollar (AUD) bounced in line with a rebound in the commodity complex. Earlier in the day the market digested and shrugged of some dovish minutes from the August RBA meeting suggesting an early rate cut was a possibility. Overall the AUD/USD traded with a low of 0.8625 and a high of 0.8734 before closing the US session at 0.8714. Gold Gold (XAU) broke above $800 convincingly as the Feds inability to fight inflation saw Gold glitter again as a suitable inflation hedge. Overall trading with a low of USD$783 and high of USD$815 before ending the New York session at USD$814 an ounce. Technical Analysis: Weak US Housing Data Euro (EUR) Euro – 1.4790 : Initial support at 1.4631 (Aug 19 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 (JPY) Yen – 109.75 : Initial support is located at 109.55 (Aug 19 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 Sterling (GBP) Pound – 1.8675 : Initial support at 1.8513 (Aug 15 low) followed by 1.8385 (Jul 25, 2006). Initial resistance is now at 1.8679 (Aug 19 high) followed by 1.8722 (Aug 18 high). Australian Dollar (AUD) Australian Dollar – 0.8730 : Initial support at 0.8626 (Aug 19 low) followed by 0.8593 (Aug 13 low). Initial resistance is now at 0.8757 (Aug 18 High) followed by 0.8797 (Aug 12 high). Gold (XAU) Gold – 815 : Initial support at 773.5 (Aug 15 low) followed by 773 (Nov 20 reaction low). Initial resistance is now at 816.8 (Aug 19 high) followed by 836.8 (Aug 14 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of EUR and USD Image: Body: Choppy, quiet start to the Week U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) traded in a tight range against most of the majors, buoyed by continued weakness in Oil but hurt as stocks weakened. Speculation that government backed Fannie Mae and Freddie Mac would have to be bailed out cast a shadow of the banking sector. In the U.S. share markets, the NASDAQ was down 35 points (-1.45%) and the Dow Jones was down 180 points (-1.55%). Crude Oil closed down $0.90 ending the New York session at $112.87 per barrel. Looking ahead, July Building Permits are forecasted at .97M and Housing starts at .96M. Also released PPI expected at 0.6% in July with a Core reading of 0.2%. European Euro The Euro (EUR) made day highs as storms threatened Oil platforms in the Gulf of Mexico sending Oil above $115 per barrel. As the storms look set to miss, Oil retreated taking the Euro along for the ride. A blow out in Eurozone Trade Deficit by 3 Billion in June also weighed on the single currency. Overall the EUR/USD traded with a low of 1.4645 and a high of 1.4768 before closing the day at 1.4700 in the New York session. Looking ahead, German PPI is expected at 0.7% in July along with the August ZEW survey seen improving slightly to -62. Japanese Yen (JPY) The Japanese Yen (JPY) was relatively unchanged against the USD but gained against most currencies as weak US banking stocks sparked further Yen Buying. Overall the USDJPY traded with a low of 109.96 and a high of 110.55 before closing the day around 110.10 in the New York session. Looking ahead, Bank of Japan Rate announcement and Press Conference widely expected to hold at 0.5% on weakening growth outlook. Pound Sterling (GBP) The Sterling (GBP) bounced inline with the Euro but was unable to hold gains retreating during the US session. The Market is becoming increasingly certain that the BOE will cut rates before the year’s end and this could weigh on the Pound going forward. Overall the GDP/USD traded with a low of 1.8618 and a high of 1.8720 before closing the day at 1.8650 in the New York session. Australian Dollar (AUD) The Australian Dollar (AUD) gained as the commodity complex bounced lead by Oil and Gold which reclaimed the $800 level briefly before retreating with the Aussie. Attempts to rally were met with very good selling pressure especially as support for the AUD/JPY faded. Markets still see a 50/50 chance of 50 basis point cuts in September. Overall the AUD/USD traded with a low of 0.8652 and a high of 0.8748 before closing the US session at 0.8680. Looking ahead, RBA minutes from the August Meeting. Gold Gold (XAU) reclaimed the $800 an ounce level briefly as Oil surged and the USD weakened. US banking concerns also supported but a rally in the Dollar during New York capped gains. Overall trading with a low of USD$790.55 and high of USD$803.65 before ending the New York session at USD$800 an ounce. Technical Analysis: Foreign Exchange News Today Euro (EUR) Euro – 1.4690 : Initial support at 1.4646 (Aug 18 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 (JPY) Yen – 110.10 : Initial support is located at 109.64 (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 Sterling (GBP) Pound – 1.8635 : Initial support at 1.8513 (Aug 15 low) followed by 1.8385 (Jul 25, 2006). Initial resistance is now at 1.8722 (Aug 18 high) followed by 1.8787 (Aug 14 high). Australian Dollar (AUD) Australian Dollar – 0.8680 : Initial support at 0.8652 (Aug 18 low) followed by 0.8593 (Aug 13 low). Initial resistance is now at 0.8797 (Aug 14 High) followed by 0.8846 (Aug 12 high). Gold (XAU) Gold – 795 : Initial support at 773.5 (Aug 15 low) followed by 773 (Nov 20 reaction low). Initial resistance is now at 804.2 (Aug 15 low) followed by 836.8 (Aug 14 high). Article with Image: Full Size Image occupying Whole width of Column

Body: Plunging Gold support Dollar strength Last week’s Currency Trading Review The Dollar climbed to 7 month highs on the back of falling commodities and continued weakness in other economies. US data also surprised to the upside this week. US CPI climbed to its highest level in 17 years at 5.6%. The Trade Balance showed a slimming deficit as exports supported the US economy coming in at -$56.8 Billion. Retail Sales in July where negative but at expectations of -0.1%. Empire state Manufacturing Index jumped back into positive territory at +2.8 in August which along with an increase of 0.2% in July Industrial Production showed a resilient US manufacturing sector. UoM Consumer Sentiment remained at 61.7. Gold broke through support at $850 and $800 on route to multi month lows of $773 giving the Dollar a significant boost. The Euro continued to plumb new lows on the back of a weakening Eurozone growth outlook. Q2 GDP was seen lower at -0.2% which accompanied by a drop in the June Industrial Production of -0.5% weighed on the single currency. July HICP Inflation data saw a drop to 4.0% from 4.1%. The Euro closed down 2.17% at 1.4687 having opened at 1.5006. The Japanese Yen experienced a volatile week coming off highs as AUD/JPY and NZD/JPY capitulated on Wednesday and panic selling ensued. A recovery lead by stronger US stocks and Economic data allowed the USD/JPY to reclaim the 110 level and remove resistance around 110.50. On the Data Front Q2 GDP dropped to -0.6% and the Current Account grew to +493 Billion. The USD/JPY gained 0.28% closing at 110.48, after opening the week at 110.17. The GBP was the weakest currency last week falling heavily on the back of the BoE Quarterly Inflation Report which dropped Growth Projections and shaved their inflation horizon to 2010 for resumption of the 2% target range. This extremely bearish report shaved 300 pips off the cable as markets digested the outlook and pared rate hike expectations. UK CPI continued to beat expectations in July rising to 4.4% Y/Y. Also beating forecasts, July Claimant count jumping to 20K and the Unemployment rate climbing to 5.4%. The UK Trade Deficit also continued to expand in July hitting -4.7Billon. The GBP/USD lost 2.98% closing at 1.8654 after opening at 1.9210. The AUD was beaten down for a 4th week this time as Gold broke through key levels dropping over $60 an ounce and closing below $800. The RBA Monetary Policy reaffirmed the market view that rates will be cut at September’s meeting commenting that there has been a significant moderation in Demand and Inflation is expected to fall as a result. The AUD/USD closed down -2.6% at 0.8660 after opening at 0.8886. For the week starting 18/08/08. This Forex Trading Week Preview In the States; light data week with the Tuesday being the highlight. July PPI is seen up 0.6% with the Core at 0.2%. July Building Permits are seen at 970k along with Housing starts at 960K. On Thursday we have weekly Jobless claims expected at 443K. Friday rounds up the week with the Philly Fed expected at -14.5 in August and the July Leading Indicators forecast at -0.1%. We will provide our previews and reviews of these data releases in the daily summary. In the Eurozone; Important Survey data this week lead by the German ZEW Economic Sentiment on Tuesday expected at -62. Also on Tuesday German PPI for July forecasted at 0.70%. On Thursday a raft of PMI data with August Manufacturing PMI forecast at 47.0 and Services PMI seen at 48. On Friday, June Industrial Orders are seen -1.1% slightly better than -3.5% in May In the UK; The Bank of England Minutes of Wednesday are forecast to remain 7-1-1 with at least one member still predicted to vote for a rate hike. On Thursday July Retail Sales are expected to rebound from the record drop in June to -0.2% vs. -3.9% in June. On Friday Q2 GDP is expected to show a rise of 0.2%. We will provide our previews and reviews of these data releases in the daily summary. In Japan; Tuesday we have the Bank of Japan Target rate widely expected to remain at 0.50% along with the All Industries Activity Index forecast at -0.8%. Friday see the Monetary Policy Minutes released containing details of Tuesday’s Meeting We will provide our previews and reviews of these data releases in the daily summary. In Australia; quiet week with Tuesday’s RBA minutes the highlight expected to reiterate rate cuts are on the table for September. We will provide our previews and reviews of these data releases in the daily summary. Technical Analysis: Foreign Exchange Weekly Euro (EUR) 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 (JPY) 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 Sterling (GBP) 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 (AUD) 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 (XAU) 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).

Image Caption: Forex currency price chart of USD and JPY Image: Body: Dollar consolidates gains into the Weekend U.S. Dollar Trading (USD) 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. European Euro 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. Japanese Yen (JPY) 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. Pound Sterling (GBP) 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. Australian Dollar (AUD) 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 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 Analysis: Dollar Consolidates Gains Euro (EUR) 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 (JPY) 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 Sterling (GBP) 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 (AUD) 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 (XAU) 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). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of AUD and USD Image: Body: US Inflation surges to fastest pace in 17 years U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) continued to gain as US CPI surged to 17 Year Highs. July m/m Jumped 0.8% and an 5.6% annual rate. July Core CPI was more moderate at 0.3% slightly higher than the 0.2% expected but adding to arguments for interest rate hikes to control inflation. Weekly Jobless claims remained high at 450K, slightly greater than the 440K forecasted. The Dollar also found strength through another significant fall in commodities and gains in the US share market. In the U.S. share markets, the NASDAQ was up 25 points (1%) and the Dow Jones was up 82 points (0.72%). Crude Oil closed down $0.99 ending the New York session at $115.01 per barrel. Looking ahead, June TIC Net Long-Term Transactions are forecast at $65 Billion. July Capacity Utilization is seen at 79.8% along with Industrial Output at 0.0%. Also released is the Preliminary August Consumer Sentiment expected at 62 up slightly from 61.2 in July. European Euro The Euro (EUR) received a small boost as German Q2 GDP was not as bad as expected at -0.5% vs. -0.8% forecast. July Eurozone Inflation ticked down to 4.0% Y/Y from 4.1%Y/Y in June supporting the view that inflation had topped last month. Q2 Provisional GDP was seen at -0.2% for the Eurozone confirming the weakening growth outlook. Overall the EUR/USD traded with a low of 1.4777 and a high of 1.4936 before closing the day at 1.4780 in the New York session. Looking ahead, Public Holiday in the Eurozone. Japanese Yen (JPY) The Japanese Yen (JPY) lead by the USD/JPY which regained a lot of the losses seen on Wednesday’s carry trade unwind. AUD/JPY and NZD/JPY had considerable bounces during the European session and Strong US stocks also supported. A slide in commodities towards the end of the day capped further gains in the crosses. Overall the USDJPY traded with a low of 109.03 and a high of 109.99 before closing the day around 109.60 in the New York session. Pound Sterling (GBP) The Sterling (GBP) managed a slight recovery during the European session after the heavy falls seen yesterday but was unable to sustain the gains as the USD started to appreciate on falling Oil and increasing US rate hike speculation. Support at the 1.8620 held for the time being. Overall the GDP/USD traded with a low of 1.8619 and a high of 1.8788 before closing the day at 1.8680 in the New York session. Australian Dollar (AUD) The Australian Dollar (AUD) was able to recover strongly on heavy AUD/JPY buying and a bounce in both Gold and Oil. During the US session sentiment turned again as Oil dropped nearly $4 dollars off highs and gold dropped over $20 an ounce. Comments from the RBA calling for rate cuts to be passed on from the banks was seen by some as an overt declaration of rate cuts in September. Overall the AUD/USD traded with a low of 0.8670 and a high of 0.8798 before closing the US session at 0.8700. Gold Gold (XAU) continued to recover during the day before another wave of selling forced Gold back towards the $800 level. Overall trading with a low of USD$805.40 and high of USD$836.50 ending the New York session at USD$810 an ounce. UPDATE GOLD BREAKS $800 Technical Analysis: US Inflation Surges Euro (EUR) Euro – 1.4775 : Initial support at 1.4719 (76.4% retrace 1.4311 to 1.6038) followed by 1.4700 (Round Number). Initial resistance is now located 1.4815 (Aug 12 low) at followed by 1.4981 (Aug 13 high). Yen (JPY) Yen – 109.90 : Initial support is located at 109.04 (Aug 14 low) followed by 108.22 (Aug 6 low). Initial resistance is now at 110.40 (Aug 11 high) followed by 112.15 (Jan 2 high). Pound Sterling (GBP) Pound – 1.8660 : Initial support at 1.8619 (61.8% retrace 1.7048 to 2.1161) followed by 1.8518 (Oct 11 2006). Initial resistance is now at 1.9036 (Aug 13 high) followed by 1.9123 (Aug 12 high). Australian Dollar (AUD) Australian Dollar – 0.8660 : Initial support at 0.8593 (Aug 13 low) followed by 0.8513 (Jan 22 low). Initial resistance is now at 0.8797 (Aug 14 High) followed by 0.8846 (Aug 12 high). Gold (XAU) Gold – 794 : Initial support at 789.93 (61.8% retrace 640.00 to 1032.5) followed by 773 (Nov 20 reaction low). Initial resistance is now at 803 (Aug 12 low) followed by 836.8 (Aug 14 high). Article with Image: Full Size Image occupying Whole width of Column

Body: Greenback surging on Global slowdown Last week’s Currency Trading Review The Dollar staged one of its biggest rallies of the year as the global economy look set for a significant slowdown and the decoupling theory was thrown out the window. High yielders such as AUD and NZD were hurt the most as falling commodities provided a second incentive to sell. US data continued to impress with only the Weekly jobless claims surprising with a jump to 455K. The big market event was the FOMC rate decision on Tuesday where the Fed held at 2.00% and accompanied with a neutral statement highlighting Inflation concerns and downgrades to growth. June Core PCE jumped to 0.3% vs. expectations of 0.2% and Personal spending at 0.6% also impressed. June factory orders greatly exceeded forecasts of 0.7% coming in at 1.7%. The Euro fell heavily this week as the 1.5300 level gave way leading to a mass exodus of long positions. Eurozone PPI jumped to 8.0% in June but many see this as the cycle high and are anticipating the fall in Oil to relieve pressure in the coming months. Eurozone Retail Sales fell 0.6% but the big market mover was the ECB Presidents post Rate meeting comments on slowing Eurozone growth. The Euro closed down 3.6% at 1.5005 having opened at 1.5562. The Japanese was also sold heavily against the USD but managed to eek out gains against most other currencies. The Japanese government warned the Economy may be heading for a Recession and this prompted a trimming of carry trades. The USD/JPY gained 2.2% closing at 110.19, after opening the week at 107.68. The GBP was under sustained pressure as the USD strengthened hitting year lows on a break of 1.9400. UK Industrial production fell -1.6% Y/Y and the Halifax House Price Index showed a decline of -1.7% m/m. The Bank of England held rates at 5.25%. The GBP/USD lost 2.8% closing at 1.9209 after opening at 1.9750. The AUD weakened the most of the G10 currencies for the second week running as commodities weakened considerably. The RBA held rates at 7.25% on Tuesday but in the accompanying statement opened the window for cuts next month. Unemployment data surprised to the upside but could do little to alter the bearish sentiment that had engulfed this pair. The AUD/USD closed down -4.4% at 0.8887 after opening at 0.9290. For the week starting 11/08/08. This Forex Trading Week Preview Technical Analysis: Forex Weekly Preview In the States; June Trade Balance kicks off Tuesday expected at -61.8B. Tuesday we have the keenly awaited July Retail Sales are expected at -0.1% as government stimulus checks wear off. On Thursday Core CPI is expected at 0.2% and the Weekly Jobless claims are seen at 432K. Finally on Friday we have the Empire State Manufacturing Index forecast at -4.3. TIC net long term Transactions are seen at 55B out on Friday and the Preliminary UoM Consumer Sentiment seen at 62.0. We will provide our previews and reviews of these data releases in the daily summary. In the Eurozone; Industrial Production on Wednesday is seen at 0.3% for June. On Thursday German Preliminary GDP is seen at -0.8% along with French Nonfarm Payrolls forecast to fall-0.1% and the ECB bulletin. Also on Thursday we have CPI for July seen at -0.1%m/m and 4.1%y/y along with a Preliminary Q2 GDP for the Eurozone forecast at 0.2% In the UK; July PPI is seen at 1.0% on Monday along with the June Trade Balance forecast at -7.4B. On Tuesday July CPI is seen at 4.4% and the DCLG House Price Index is seen at 1.5% Y/Y. On Wednesday we have the Claimant Count forecast at 17.5K along with the Average Earning Index forecast at 3.6% Y/Y. Wednesday also sees the release of the BoE Inflation Report. Europe has a Holiday on Friday. We will provide our previews and reviews of these data releases in the daily summary. In Japan; Wednesday Preliminary Q2 GDP is keenly awaited as it is expected to be negative -0.6% the first leg of a possible recession. On Thursday we have the Tertiary Activity Index forecast at -0.3%. We will provide our previews and reviews of these data releases in the daily summary. In Australia; light data week with the RBA Monetary Policy Statement on Monday expected to confirm a more dovish stance and the WPI index out on Wednesday expected at 1.0%. We will provide our previews and reviews of these data releases in the daily summary. Euro (EUR) Euro – 1.4890 : Initial support at 1.4842 (Aug 13 low) followed by 1.4715 (Aug 12 low). Initial resistance is now located 1.4981 (Aug 13 high) at followed by 1.5084 (Aug 11 high). Yen (JPY) Yen – 109.40 : Initial support is located at 108.22 (Aug 6 low) followed by 107.29 (Aug 7). Initial resistance is now at 109.39 (Aug 13 high) followed by 110.40 (Aug 11 high). Pound Sterling (GBP) Pound – 1.8670 : Initial support at 1.8619 (61.8% retrace 1.7048 to 2.1161) followed by 1.8518 (Oct 11 2006). Initial resistance is now at 1.9036 (Aug 13 high) followed by 1.9123 (Aug 12 high). Australian Dollar (AUD) Australian Dollar – 0.9695 : Initial support at 0.8593 (Aug 13 low) followed by 0.8513 (Jan 22 low). Initial resistance is now at 0.8743 (Aug 13 low) followed by 0.8846 (Aug 12 high). Gold (XAU) Gold – 830 : Initial support at 803 (AUG 12 low) followed by 789.9 (61.8% retrace 640.00 to 1032.5). Initial resistance is now at 846 (May 2 support) followed by 865 (Aug 11 high).

Image Caption: Forex currency price chart of GBP and USD Image: Body: Pound crashes on BOE Inflation report U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) had a busy trading day with multiple themes present. During the Asian session stock weakness provoked an unwinding of the JPY carry trades with the AUD/JPY and NZD/JPY taking the brunt of the pressure. In the European session heavy Cable sales supported the Dollar but stock weakness capped gains. Crude Oil shot higher in New York as US oil inventories fell more than expected at -0.4M barrels. US Retail Sales in July were weak but as expected at -0.1% and 0.4% (0.5%) Core. A warning from Merrill Lynch weighed on the stock market. In the U.S. share markets, the NASDAQ was down 2 points (-0.08%) and the Dow Jones was down 109 points (-0.94%). Crude Oil closed up $2.99 ending the New York session at $116.00 per barrel. Looking ahead, July CPI is seen up 0.4% or 5.1% y/y and the weekly Jobless claims are seen at 432K. European Euro The Euro (EUR) spent most of the day pivoting the 1.4900 level with little impetus to break either way as large offers above 1.5000 and option protection at the 1.4800 levels limited action. Industrial production weakened to 0.0% in June vs. expectations of 0.3%. Overall the EUR/USD traded with a low of 1.4840 and a high of 1.4980 before closing the day at 1.4930 in the New York session. Looking ahead, July CPI is seen at -0.1% and 4.1% Y/Y. German Q2 is seen at -0.8 after a strong 1.5% in Q1. Japanese Yen (JPY) The Japanese Yen (JPY) heavy unwinding of the carry trades early in Asia yesterday preceded a gradual rally that lasted into US close for almost all crosses except GBY/JPY. AUD/JPY fell over two big figures along with the NZD/JPY at the height of the panic selling. The June Japanese Tertiary Industry Activity Index fell -0.8% vs. expectations for a -0.3%. Overall the USDJPY traded with a low of 108.35 and a high of 109.74 before closing the day around 109.30 in the New York session. Pound Sterling (GBP) The Sterling (GBP) dropped 3 big figures after the BoE Inflation Report predicted that CPI in the UK will fall back to 2.0% in two years time and that growth projection for the H1 in 2009 has been dropped to 0.0%. July CPI jumped 0.6% to 4.4% y/y. The Claimant Count Change jumped to 20.1K above forecast of 17.K. Overall the GDP/USD traded with a low of 1.8639 and a high of 1.9037 before closing the day at 1.8700 in the New York session. Australian Dollar (AUD) The Australian Dollar (AUD) came under server pressure as heavy AUD/JPY sales pushed the Aussie through 86 cents. A recovery in Gold and Oil allowed some relief to the commodity currency during the European and American session. Overall the AUD/USD traded with a low of 0.8590 and a high of 0.8772 before closing the US session at 0.8730. Gold Gold (XAU) Jumped as Oil surged on the US inventory data and financial concerns flared up. Overall trading with a low of USD$805.90 and high of USD$830 ending the New York session at USD$826 an ounce. Technical Analysis: Pound Crashes Euro (EUR) Euro - 1.4890 : Initial support at 1.4842 (Aug 13 low) followed by 1.4715 (Aug 12 low). Initial resistance is now located 1.4981 (Aug 13 high) at followed by 1.5084 (Aug 11 high). Yen (JPY) Yen - 109.40 : Initial support is located at 108.22 (Aug 6 low) followed by 107.29 (Aug 7). Initial resistance is now at 109.39 (Aug 13 high) followed by 110.40 (Aug 11 high). Pound Sterling (GBP) Pound - 1.8670 : Initial support at 1.8619 (61.8% retrace 1.7048 to 2.1161) followed by 1.8518 (Oct 11 2006). Initial resistance is now at 1.9036 (Aug 13 high) followed by 1.9123 (Aug 12 high). Australian Dollar (AUD) Australian Dollar - 0.9695 : Initial support at 0.8593 (Aug 13 low) followed by 0.8513 (Jan 22 low). Initial resistance is now at 0.8743 (Aug 13 low) followed by 0.8846 (Aug 12 high). Gold (XAU) Gold - 830 : Initial support at 803 (AUG 12 low) followed by 789.9 (61.8% retrace 640.00 to 1032.5). Initial resistance is now at 846 (May 2 support) followed by 865 (Aug 11 high). Article with Image: Full Size Image occupying Whole width of Column

Image: Body: USD consolidates recent gains, Yen gains on credit worries. U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) continued to be the extremely well supported as gold made new lows and Oil failed to maintain gains. The US Trade Balance for June Narrowed to -59.8B from -60.5B in May and expectations of -62.5B. In the U.S. share markets, the NASDAQ was down 9 points (-0.38%) and the Dow Jones was up 139 points (-1.19%). Crude Oil closed down $1.44 ending the New York session at $113.01 per barrel. Looking ahead, July retail sales are seen down -0.1% in July (0.1% June) and import prices are seen increasing 1%. European Euro The Euro (EUR) staged a recovery off lows in the Asian session but once again found selling pressure during the US session as US data beat estimates and oil receded from highs. Overall the EUR/USD traded with a low of 1.4815 and a high of 1.4965 before closing the day at 1.4920 in the New York session. Looking ahead, Industrial production m/m forecast at 0.1%. Japanese Yen (JPY) The Japanese Yen (JPY) gained across the board as banking write downs sparked a new wave of risk aversion. All of the crosses made fresh multi month lows lead by the GBP/JPY. Q2 GDP came in at -0.6% and the Q2 GDP Deflator was slightly worse than forecast at -1.6% vs. expectations of -1.5%. Overall the USDJPY traded with a low of 109.28 and a high of 110.36 before closing the day around 109.40 in the New York session. Pound Sterling (GBP) The Sterling (GBP) Broke through the Key 1.9000 figure early in the Asian session and Strong CPI numbers for July were not enough to reverse market sentiment and cable closed below the figure. July CPI jumped 0.6% to 4.4% y/y. Overall the GDP/USD traded with a low of 1.8953 and a high of 1.9122 before closing the day at 1.8960 in the New York session. Looking ahead, July Claimant Count seen at 17.5K and Average Earnings for June forecast at 3.6%. Australian Dollar (AUD) The Australian Dollar (AUD) bounced again into the European session but as Gold tested the $800 support the Aussie was sold back to the .8700 level. The Nab Business confidence survey remained at -9 and the Westpac Consumer sentiment jumped 9.1% in July. Heavy AUD/JPY sales weighed. Overall the AUD/USD traded with a low of 0.8703 and a high of 0.8845 before closing the US session at 0.8710. UPDATE Wage Price Index Jumps to 1.2% in Q2. Gold Gold (XAU) selling continued into the Asia session with Gold testing support at $800. A bounce in Oil allowed a temporary reprieve but was unable to be sustained. Overall trading with a low of USD$802.90 and high of USD$826.30 ending the New York session at USD$812 an ounce. Technical Analysis: Yen Gains On Credit Worries Euro (EUR) Euro - 1.4930 : Initial support at 1.4815 (Aug 12 low) followed by 1.4719 (76.4% retrace 1.4311 to 1.6038). Initial resistance is now located 1.4965 (Aug 12 low) at followed by 1.5084 (Aug 11 high). Yen (JPY) Yen - 108.55 : Initial support is located at 108.22 (Aug 6 low) followed by 107.29 (Aug 7). Initial resistance is now at 109.14 (Aug 7 low) followed by 110.40 (Aug 11 high). Pound Sterling (GBP) Pound - 1.8955 : Initial support at 1.8838 (Nov 15, 2006) followed by 1.8619 (61.8% retrace 1.7048 to 2.1161). Initial resistance is now at 1.9123 (Aug 12 high) followed by 1.9257 (Aug 11 high). Australian Dollar (AUD) Australian Dollar - 0.9630 : Initial support at 0.8612 (Jan 23 low) followed by 0.8600 (Round Number). Initial resistance is now at 0.8704 (Aug 12 low) followed by 0.8846 (Aug 12 high). Gold (XAU) Gold - 812 : Initial support at 803 (AUG 12 low) followed by 789.9 (61.8% retrace 640.00 to 1032.5). Initial resistance is now at 826.50 (Aug 12 low) followed by 846 (May 2 high).

Image Caption: Forex currency price chart of EUR and USD Image: Body: Major USD rally as Key Technical levels broken. U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) continued its post Trichet rally into the Asian session, gaining against every currency. US economic data missed targets but this was overlooked, Q2 Non productivity rose 2.2% vs. 2.5% expected and Labor Costs rose 1.3% around expectations. Oil continued to slide and prompted a major US equity rally also supporting the dollar. In the U.S. share markets, the NASDAQ was up 58 points (2.48%) and the Dow Jones was up 302 points (2.65%). Crude Oil closed down $4.82 ending the New York session at $115.20 per barrel. European Euro The Euro (EUR) broke through the Key 1.5300 level in early Asian trade and continued to fall testing the 1.5000 level during the US session. Falling Oil and a readjustment of Eurozone economic outlooks the main catalyst. Overall the EUR/USD traded with a low of 1.4997 and a high of 1.5336 before closing the day at 1.5005 in the New York session. Looking ahead, German Wholesale Price index is expected at 0.5% in July. Japanese Yen (JPY) The Japanese Yen (JPY) gained against most crosses as the major’s weighed lead by the EUR/USD on the EUR/JPY. USD/JPY did gain though breaking through the key 110 level as US stocks surged. Overall the USDJPY traded with a low of 109.30 and a high of 110.37 before closing the day around 110.20 in the New York session. Looking ahead, July Corporate Goods Price expected at 0.8%. Pound Sterling (GBP) The Sterling (GBP) tracked the Euro lower breaking through supports at 1.9410 to year lows. Market is awaiting the BOE Inflation report for further Interest rate direction. Overall the GDP/USD traded with a low of 1.9146 and a high of 1.9439 before closing the day at 1.9200 in the New York session. Looking ahead, July PPI Core Output is seen at 0.4%, PPI input at 1% and PPI Output at 0.5%. Also released the June trade Balance seen at -7.4Bln. Australian Dollar (AUD) The Australian Dollar (AUD) continued its recent plunge this time as the USD strengthened, breaking through .9000 for the first time since March and confirming the biggest 3 week fall since 1980. Overall the AUD/USD traded with a low of 0.8866 and a high of 0.9077 before closing the US session at 0.8990. Looking ahead, RBA Monetary Policy statement. Gold Gold (XAU) broke lower as USD strengthened and Oil dropped off. Strong support at $850 held. Overall trading with a low of USD$851.50 and high of USD$873.50 ending the New York session at USD$857 an ounce. Technical Analysis: Foreign Exchange Currency News Euro (EUR) Euro – 1.4955 : Initial support at 1.4956 (Feb 1 low) followed by 1.4778 (Feb 28 low). Initial resistance is now located 1.5025 (Aug 8 low) at followed by 1.5335 (Aug 8 high). Yen (JPY) Yen – 109.80 : Initial support is located at 109.14 (Aug 7 low) followed by 108.22 (Aug 6). Initial resistance is now at 110.24 (AUG 8 high) followed by 112.15 (Jan 2 high). Pound Sterling (GBP) Pound – 1.9165 : Initial support at 1.9105 (50% retrace 1.7048 to 2.1161) followed by 1.8838 (Nov 15 2006). Initial resistance is now at 1.9438 (Aug 8 high) followed by 1.9538 (Aug 7 high). Australian Dollar (AUD) Australian Dollar – 0.9860 : Initial support at 0.8875 (Feb 7 low) followed by 0.8819 (Jan 31 low). Initial resistance is now at 0.9074 (Aug 8 high) followed by 0.9131 (Aug 7 high). Gold (XAU) Gold – 860 : Initial support at 851.73 (Aug 8 low) followed by 846 (May 2 low). Initial resistance is now at 873.5 (Aug 6 high) followed by 886.5 (Aug 5 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of XAU and USD Image: Body: Major USD rally as Key Technical levels broken. U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) continued its post Trichet rally into the Asian session, gaining against every currency. US economic data missed targets but this was overlooked, Q2 Non productivity rose 2.2% vs. 2.5% expected and Labor Costs rose 1.3% around expectations. Oil continued to slide and prompted a major US equity rally also supporting the dollar. In the U.S. share markets, the NASDAQ was up 58 points (2.48%) and the Dow Jones was up 302 points (2.65%). Crude Oil closed down $4.82 ending the New York session at $115.20 per barrel. European Euro The Euro (EUR) broke through the Key 1.5300 level in early Asian trade and continued to fall testing the 1.5000 level during the US session. Falling Oil and a readjustment of Eurozone economic outlooks the main catalyst. Overall the EUR/USD traded with a low of 1.4997 and a high of 1.5336 before closing the day at 1.5005 in the New York session. Looking ahead, German Wholesale Price index is expected at 0.5% in July. Japanese Yen (JPY) The Japanese Yen (JPY) gained against most crosses as the major’s weighed lead by the EUR/USD on the EUR/JPY. USD/JPY did gain though breaking through the key 110 level as US stocks surged. Overall the USDJPY traded with a low of 109.30 and a high of 110.37 before closing the day around 110.20 in the New York session. Looking ahead, July Corporate Goods Price expected at 0.8%. Pound Sterling (GBP) The Sterling (GBP) tracked the Euro lower breaking through supports at 1.9410 to year lows. Market is awaiting the BOE Inflation report for further Interest rate direction. Overall the GDP/USD traded with a low of 1.9146 and a high of 1.9439 before closing the day at 1.9200 in the New York session. Looking ahead, July PPI Core Output is seen at 0.4%, PPI input at 1% and PPI Output at 0.5%. Also released the June trade Balance seen at -7.4Bln. Australian Dollar (AUD) The Australian Dollar (AUD) continued its recent plunge this time as the USD strengthened, breaking through .9000 for the first time since March and confirming the biggest 3 week fall since 1980. Overall the AUD/USD traded with a low of 0.8866 and a high of 0.9077 before closing the US session at 0.8990. Looking ahead, RBA Monetary Policy statement. Gold Gold (XAU) broke lower as USD strengthened and Oil dropped off. Strong support at $850 held. Overall trading with a low of USD$851.50 and high of USD$873.50 ending the New York session at USD$857 an ounce. Technical Analysis: Major USD Rally Euro (EUR) Euro – 1.4955 : Initial support at 1.4956 (Feb 1 low) followed by 1.4778 (Feb 28 low). Initial resistance is now located 1.5025 (Aug 8 low) at followed by 1.5335 (Aug 8 high). Yen (JPY) Yen – 109.80 : Initial support is located at 109.14 (Aug 7 low) followed by 108.22 (Aug 6). Initial resistance is now at 110.24 (AUG 8 high) followed by 112.15 (Jan 2 high). Pound Sterling (GBP) Pound – 1.9165 : Initial support at 1.9105 (50% retrace 1.7048 to 2.1161) followed by 1.8838 (Nov 15 2006). Initial resistance is now at 1.9438 (Aug 8 high) followed by 1.9538 (Aug 7 high). Australian Dollar (AUD) Australian Dollar – 0.9860 : Initial support at 0.8875 (Feb 7 low) followed by 0.8819 (Jan 31 low). Initial resistance is now at 0.9074 (Aug 8 high) followed by 0.9131 (Aug 7 high). Gold (XAU) Gold – 860 : Initial support at 851.73 (Aug 8 low) followed by 846 (May 2 low). Initial resistance is now at 873.5 (Aug 6 high) followed by 886.5 (Aug 5 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of EUR and USD Image: Body: USD soars on weakening EURO U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) took another leg up as the recent USD rally continued. US data was mixed with weekly jobless claims soaring to a six year high of 455K. Pending homes sales surprised to the upside though coming in at 5.3% in June vs. expectations of -1%. Oil was volatile but ended up on supply concerns from a fire in Turkey. In the U.S. share markets, the NASDAQ was down 22 points (0.95%) and the Dow Jones was down 224 points (1.93%). Crude Oil closed up $1.44 ending the New York session at $120.02 per barrel. Looking ahead, Q2 labor Costs expected at 1.5% (previous 2.2%) and Productivity at 2.5% (previous 2.6%). European Euro The Euro (EUR) was sold heavily as ECB President talked about slowing growth in the ECB post rate press conference. The ECB held rates at 4.25% and although Trichet spoke about inflation the market responded to comments on growth. Overall the EUR/USD traded with a low of 1.5310 and a high of 1.5505 before closing the day at 1.5310 in the New York session. UPDATE EURO BREAKS 1.5300 Japanese Yen (JPY) The Japanese Yen (JPY) gained as risk aversion entered the market on weaker US stocks. The USD/JPY held up well but EUR/JPY and GDP/JPY fell heavily as their respective majors slid. Overall the USDJPY traded with a low of 109.13 and a high of 109.81 before closing the day around 109.40 in the New York session. Pound Sterling (GBP) The Sterling (GBP) fell with the Euro as the Bank of England also held rates. No statement was released but recent economic data made the bias a cut in coming months. The Halifax House Price Index fell -1.7% last month. Overall the GDP/USD traded with a low of 1.9420 and a high of 1.9538 before closing the day at 1.9440 in the New York session. Australian Dollar (AUD) The Australian Dollar (AUD) fell as the USD strengthened but held up well against other currencies after the July Employment report surprised to the upside. July Unemployment change was +10.9K vs. +5K expected. Overall the AUD/USD traded with a low 0.9050 and a high of 0.9130 before closing the US session at 0.9080. UPDATE AUSSIE BREAKS 0.9000 Gold Gold (XAU) fell heavily bowing to USD strength although was supported by Oil. Overall trading with a low of USD$868.60 and high of USD$884.90 ending the New York session at USD$872 an ounce. Technical Analysis: USD Soars Euro (EUR) Euro – 1.5235 : Initial support at 1.5200 (Aug 8 low) followed by 1.5145 (Mar 5 low). Initial resistance is now located 1.5400 (Aug 6 low) at followed by 1.5500 (round number). Yen (JPY) Yen – 109.60 : Initial support is located at 109.05 (Aug 6 hrly low) followed by 108.60 (Jun and Feb tops). Initial resistance is now at 109.70 (AUG 7 high) followed by 110.12 (Jan 9 high). Pound Sterling (GBP) Pound – 1.9370 : Initial support at 1.9355 (May 14 low) followed by 1.9340 (Jan 22 low). Initial resistance is now at 1.9440 (Aug 8 high) followed by 1.9545 (Aug 6 high). Australian Dollar (AUD) Australian Dollar – 0.9010 : Initial support at 0.8955 (Mar 20 low) followed by 0.8925 (Feb 13 low). Initial resistance is now at 0.9075 (Aug 8 high) followed by 0.9130 (hourly resistance). Gold (XAU) Gold – 871 : Initial support at 870 (Aug 5 low) followed by 858 (Jun 12 low). Initial resistance is now at 886 (Aug 6 high) followed by 894.6 (Aug 5 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of AUD and USD Image: Body: Eurozone and UK interest rates in Focus. U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) continued to strengthen broadly gaining against all currencies as Oil continued to slide and US Treasury’s rallied. Stocks remained buoyant as mining and energy shares rebounded from large sell offs and Cisco reported better that estimated earnings. The Weekly MBA Purchases Index rose to 315.2 from 309.5. In the U.S. share markets, the NASDAQ was up 28 points (1.21%) and the Dow Jones was up 40 points (0.35%). Crude Oil closed down $0.59 ending the New York session at $118.59 per barrel. Looking ahead, Weekly Jobless Claims are seen down to 423K from 448K last week. June Pending Homes Sales seen down -1%. European Euro The Euro (EUR) remained on the back foot as economic data disappointed and speculation mounted ECB President Trichet might change tone on the European economy. June German Factory Orders fell -2.9% in a surprise fall with the markets expecting a +0.4%. Overall the EUR/USD traded with a low of 1.5398 and a high of 1.5517 before closing the day at 1.5415 in the New York session. Looking ahead, ECB Interest Rate announcement widely expected to hold at 4.25%. Also released the June German Trade Balance seen at $15 Billion, and Import Prices forecast to rise 1.4%. June German Industrial Production is expected at 0.8%. Japanese Yen (JPY) The Japanese Yen (JPY) was sold heavily as USD/JPY popped through multiple resistance levels shooting through 109 before heavy offers before the key 110 levels finally contained the surge. Crosses remained bid and made solid gains across the board. Core Machinery Orders m/m was better than expected at -2.6% vs. forecast of -9.6%. Overall the USDJPY traded with a low of 108.25 and a high of 109.88 before closing the day around 108.80 in the New York session. Pound Sterling (GBP) The Sterling (GBP) fell below the Key 1.9500 level on USD strength but was able to make gains against the JPY. Overall the GDP/USD traded with a low of 1.9467 and a high of 1.9595 before closing the day at 1.9555 in the New York session. Looking ahead, BOE Interest Rate announcement widely tipped to stay at 5.00%. Australian Dollar (AUD) The Australian Dollar (AUD) came under continued pressure as home loan data confirmed a weakening in the housing industry and the commodity complex continued to fall. AUD/JPY did manage to eek out small gains. Overall the AUD/USD traded with a low 0.9065 and a high of 0.9203 before closing the US session at 0.9080. Looking ahead, Unemployment Rate is expected to rise to 4.3% in July with a employment change +1.25K. Gold Gold (XAU) traded in a tighter range declining as the USD continued to gain and Oil remained under pressure. Overall trading with a low of USD$873 and high of USD$894 ending the New York session at USD$875 an ounce. Technical Analysis: Foreign Exchange Currencies News Euro (EUR) Euro – 1.5425 : Initial support at 1.5342 (June 16 low) followed by 1.5303 (Jun 13 reaction low). Initial resistance is now located 1.5517 (Aug 6 high) at followed by 1.5578 (Aug 5 high). Yen (JPY) Yen – 109.40 : Initial support is located at 108.22 (Aug 6 low) followed by 107.29 (Aug 1 low). Initial resistance is now at 109.96 (50 retrace 124.15 to 95.76) followed by 110.12 (Jan 9 high). Pound Sterling (GBP) Pound – 1.9480 : Initial support at 1.9410 (Jun 13 reaction low) followed by 1.9363 (May 14 low). Initial resistance is now at 1.9595 (Aug 6 high) followed by 1.9625 (Aug 5 high). Australian Dollar (AUD) Australian Dollar – 0.9090 : Initial support at 0.9032 (Apr 1 low) followed by 0.9023 (61.8% retrace 0.8513 to 0.9849). Initial resistance is now at 0.9206 (Aug 6 high) followed by 0.9301 (Aug 5 High). Gold (XAU) Gold – 880 : Initial support at 873 (Aug 5 low) followed by 858 (Jun 12 low). Initial resistance is now at 894.6 (Aug 5 high) followed by 916.75 (Aug 1 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of USD and JPY Image: Body: US and Australia hold Rates, Greenback gains on Oil U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) gained all day as investors sold Oil, Gold and other commodities. Stronger than forecast Non Manufacturing ISM for July 49.5 (vs. 48.8 expected) and Oil below $120 a barrel sent equities off on an impressive rally. The Feds decisions to hold rates at 2.00% and tone down the accompanying statement halted the USD rally but added fuel to stocks. Dropped from the FED statement was the sentence downside risks seem to have diminished, but added was that inflation was a significant concern. In the U.S. share markets, the NASDAQ was up 64 points (2.81%) and the Dow Jones was up 331 points (2.94%). Crude Oil closed down $2.24 ending the New York session at $119.17 per barrel. Looking ahead, Weekly MBA Purchase index. European Euro The Euro (EUR) punched through 1.5500 in early European trading as Oil fell below the key $120 per barrel level and European sales were negative at -0.6% in June. A brief rally after the FOMC held at 2.00% was quickly reversed with euro hovering at day lows for the remainder of the US session. Overall the EUR/USD traded with a low of 1.5446 and a high of 1.5578 before closing the day at 1.5469 in the New York session. Looking ahead, German Industrial Orders for June forecast 0.4% from -0.9% in May. Japanese Yen (JPY) The Japanese Yen (JPY) made gains against most currencies except the USD as heavy selling of GBP/JPY, AUD/JPY and EUR/JPY supported the Yen. Better US data and Buoyant stocks help off the crosses off there lows and USD/JPY reclaim the 108 handle. Overall the USDJPY traded with a low of 107.68 and a high of 108.34 before closing the day around 108.18 in the New York session. Looking ahead, June leading indicators seen at -1.8. Pound Sterling (GBP) The Sterling (GBP) fell in sympathy with the Euro in the face of broad based USD strength. June PMI services were slightly better than expected at 47.4 vs. forecasts of 46.7. June Industrial Production weakened -0.2%. Overall the GDP/USD traded with a low of 1.9524 and a high of 1.9611 before closing the day at 1.9555 in the New York session. Australian Dollar (AUD) The Australian Dollar (AUD) continued to fall yesterday after the RBA held rates at 7.25% and released a dovish accompanying statement. The RBA opened the door to rate cuts with the comment ‘scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing’. AUD/JPY sales weighed and heavy falls in the CRB index (commodity index) hurt sentiment. Overall the AUD/USD traded with a low 0.9134 and a high of 0.9299 before closing the US session at 0.9155. Gold Gold (XAU) continued to fall as both Crude Oil dropped below the key $120 and the USD strengthened. Gold broke below $889 an ounce the 200 day moving average. Overall trading with a low of USD$873 and high of USD$894 ending the New York session at USD$875 an ounce. Technical Analysis: US And Australia Hold Rates Euro (EUR) Euro – 1.5475 : Initial support at 1.5463 (Aug 5 low) followed by 1.5462 (76.4% retracement of 1.5284 to 1.6038). Initial resistance is now located 1.5578 (Aug 5 high) at followed by 1.5632 (Aug 4 high). Yen (JPY) Yen – 108.40 : Initial support is located at 107.29 (Aug 1 low) followed by 106.58 (July 25 low). Initial resistance is now at 108.59 (Jun 16 high) followed by 108.61 (Feb 14 high). Pound Sterling (GBP) Pound – 1.9555 : Initial support at 1.9525 (Aug 5 low) followed by 1.9410 (Jun 13 low). Initial resistance is now at 1.9625 (Aug 5 high) followed by 1.9762 (Aug 4 high). Australian Dollar (AUD) Australian Dollar – 0.9175 : Initial support at 0.9091 (Apr 3 low) followed by 0.9032 (April 1 low). Initial resistance is now at 0.9301 (Aug 5 high) followed by 0.9347 (Aug 4 High). Gold (XAU) Gold – 878 : Initial support at 874 (Jun 24 low) followed by 858 (Jun 12 low). Initial resistance is now at 894.6 (Aug 5 high) followed by 916.75 (Aug 1 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of EUR and USD Image: Body: FOMC, Australian rate decisions in Focus U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) better than expected data and a large sell off in Oil allowed the Dollar to gain the upper hand leading into the FOMC announcement. June Core PCE which measures consumer inflation climbed faster than expected to 0.3% vs. 0.2% forecasted. Personal income also rose 0.1% vs. expectations of a -0.2% slide. Factory Orders for June beat forecasts at 1.7% its fastest rate since December as rising food and energy prices surged. In the U.S. share markets, the NASDAQ was down 25 points (-1.10%) and the Dow Jones was down -42 points (-0.37%). Crude Oil closed down $3.69 ending the New York session at $121.41 per barrel. Looking ahead, July Non-manufacturing ISM Composite is expected at 48.5. The US FED meets tonight to discuss interest rates, widely expected to remain at 2.0%. European Euro The Euro (EUR) traded in a tight range as markets wait for the interest rate decision during the week with the US on Tuesday and ECB on Thursday. Small gains on the back of higher than expected Eurozone PPI in June of 0.9% m/m, 8% y/y were relinquished by large falls in Crude Oil. Overall the EUR/USD traded with a low of 1.5565 and a high of 1.5631 before closing the day at 1.5565 in the New York session. Looking ahead, July Eurozone PMI service’s is forecast 48.3. Also released June Retail Sales expected at -0.6% m/m and -1.2% y/y. Japanese Yen (JPY) The Japanese Yen (JPY) lost ground against most currencies as strong buying of the EUR/JPY supported the crosses. AUD/JPY and NZD/JPY recovered off the lows from last week as markets saw the sell off a little overdone. Overall the USDJPY traded with a low of 107.47 and a high of 108.29 before closing the day around 108.25 in the New York session. Pound Sterling (GBP) The Sterling (GBP) was the big loser of the day as economic concerns mounted and expectations of rates cuts intensified. Construction PMI in July dropped again to 36.7 from 38.8 in June. Overall the GBP/USD traded with a low of 1.9601 and a high of 1.9761 before closing the day at 1.9625 in the New York session. Looking ahead, July PMI services forecast at 46.7 and June Manufacturing Production expected flat 0.0%. Australian Dollar (AUD) The Australian Dollar (AUD) an initial bounce throughout the Asian and European session was unable to be maintained as Gold and Oil fell considerable and the USD strengthened during the US session. Home prices fell -0.3% in June better than -1.1% expected. Overall the AUD/USD traded with a low 0.9285 and a high of 0.9347 before closing the US session at 0.9295. Looking ahead, RBA meets today to discuss interest rates, widely believed to hold at 7.25% but with a risk of cut or dovish statement given recent economic data. Gold Gold (XAU) fell through $900 an ounce as Oil plunges lower in New York. Speculation of a peak in commodities prices has kept Gold under Pressure. Overall trading with a low of USD$895.70 and high of USD$915.20 ending the New York session at USD$896 an ounce. Technical Analysis: Foreign Exchange Now Euro (EUR) Euro – 1.5570 : Initial support at 1.5515 (Aug 1 low) followed by 1.5493 (June 30 low). Initial resistance is now located 1.5632 (Aug 4 high) at followed by 1.5710 (76.4% retracement of the 1.5303 to 1.6038 advance). Yen (JPY) Yen – 108.20 : Initial support is located at 107.29 (Aug 1 low) followed by 106.58 (July 25 low). Initial resistance is now at 108.38 (July 31 high) followed by 108.59 (June 16 high). Pound Sterling (GBP) Pound – 1.9620 : Initial support at 1.9555 (76.4% retracement of 1.9363 to 2.0157) Initial resistance is now at 1.9762 (Aug 4 high) followed by 1.9843 (Aug 1 high). Australian Dollar (AUD) Australian Dollar – 0.9295 : Initial support at 0.9286 (Aug 4 low) followed by 0.9276 (May 2 low). Initial resistance is now at 0.9419 (Aug 1 high) followed by 0.9476 (July 31 High). Gold (XAU) Gold – 895 : Initial support at 894.25 (Jul 31 low) followed by 888.68 (76.4% retracement of the 858.00 to 988.00 advance). Initial resistance is now at 925.2 (July 31 high) followed by 935.30 (July 25 high). Article with Image: Full Size Image occupying Whole width of Column

Body: Dollar sentiment turning cautiously positive Last week’s Currency Trading Review The Dollar gained this week as US data came in better than expected and other economies data weakened considerably putting an end to the decoupling theory. Supply concerns and a reemergence of geopolitical tensions caused Oil to remain above $120 and helped cap USD gains. Consumer Confidence improved slightly in July to 51.9 and ADP employment report surprised with a gain of 9K. US GDP came in at the lower end of expectations at 1.9% and the sharp jump in weekly jobless claims offset the ADP surprise going into the Nonfarm payrolls on Friday. July Nonfarm came in better than expectations at -51K but was accompanied by a tick higher in the Unemployment rate to 5.7%. To finish the week off the July Manufacturing beat forecasts at 50.0 remaining above the contraction level. The Euro lost ground against the USD for the second week after a series of weak Data releases. German Consumer confidence slipped to 2.1 vs. forecasts of 3.5. Eurozone CPI ticked higher to 4.1% well above the ECB comfort zone but with Oil of $20 from highs some believe that the July reading could be the cycle high. Also weakening in July, German Retail Sales dropped -1.4% vs. forecast of -0.5%. The Euro closed down 0.95% at 1.5562 having opened at 1.5710. The Japanese was the week’s main winner with Japanese retail investors paring back carry trades sending the AUD/JPY and NZD/JPY significantly lower. Large falls in the majors dragged the EUR/JPY and GBY/JPY down as well. Retail sales beat expectations at 0.3% in June Y/Y. Concerning was the Preliminary Industrial Productions figures out for June at -2.0%. The USD/JPY fell -0.16% closing at 107.68, after opening the week at 107.85. The GBP was once again under pressure from both a strengthening USD and weak of disappointing economic data. CBI Distributive trades fell to -36 a record low and were followed by GFK consumer confidence falling to -39 in July another record low. July manufacturing fell to a 10 year low of 44.3 and Nationwide house prices dropped another 1.7% in July. The GBP/USD lost 0.83% closing at 1.9750 after opening at 1.9913. The AUD fell the most of the G10 currencies last week as markets aggressively factored in rate cute from the RBA on a deteriorating economic outlook. Key data weakened including the June Retail sales down 1.0% vs. forecast of a gain of 0.2% and June Building Approvals dropping 0.7% vs. expectations of 1.0% gain. Supporting was a Trade surplus in June of 411 Million vs. Trade deficit of -300 million in May. The AUD/USD closed down -2.90% at 0.9290 after opening at 0.9559. For the week starting 04/08/08. This Forex Trading Week Preview In the States; markets will be looking for clearer US interest rate outlook with the FOMC decision on Tuesday expected to remain at 2.00%. On Monday we have Core PCE prices expected to come in at 0.2% after gaining 0.1% in May. Tuesday also has the Non-manufacturing ISM forecast at 48.2. Thursday sees June Pending Home sales at -1.0% after dropping -4.7% in May. Thursday also see the release of June Consumer Credit expected at $7.8 Billion from $6.4 Billion in May. We will provide our previews and reviews of these data releases in the daily summary. In the Eurozone; Thursdays ECB announcement will be the Highlight widely expected to be held at 4.25% the press conference afterwards will be critical in predicting direction of next move. Also released this week the Eurozone PPI on Monday expected at 0.9% m/m and the Eurozone PMI services expected at 49.3 in July. Tuesday also sees the release of July retail sales forecast at -0.6%. On Wednesday we have German Factory orders seen at -0.3% m/m. In the UK; Bank of England meeting expected to hold at 5.0% on Thursday as Inflation risks are weighed down by economic contraction. Other data includes a busy Tuesday with June manufacturing production seen at 0.2%, July PMI Services expected at 46.7 down from 47.1 in June and Nationwide July Consumer Confidence forecast at 57. We will provide our previews and reviews of these data releases in the daily summary. In Japan; light data week with the Core Machinery Orders on Thursday seen at -9.5% the highlight. On Friday we have the Economy Watchers Current Index expected to continue to weaken from previous levels of 29.5. We will provide our previews and reviews of these data releases in the daily summary. In Australia; RBA interest decision on Tuesday widely seen as being held at 7.25% but with a small chance of a cut. Wednesday sees June Home Loans at -2.0% after sliding 7.9%. On Thursday we have the Employment change numbers for July expected at +5K with a tick up in the Unemployment Rate to 4.3% form 4.2% in June. We will provide our previews and reviews of these data releases in the daily summary. Technical Analysis: Foreign Exchange Weekly Updates Euro (EUR) Euro – 1.5565 : Initial support at 1.5515 (Aug 1 low) followed by 1.5493 (June 30 low). Initial resistance is now located 1.5603 (Aug 1 high) at followed by 1.5710 (76.4% retracement of the 1.5303 to 1.6038 advance). Yen (JPY) Yen – 107.55 : Initial support is located at 107.29 (Aug 1 low) followed by 106.58 (July 25 low). Initial resistance is now at 107.91 (Aug 1 high) followed by 108.38 (Jul 31 high). Pound Sterling (GBP) Pound – 1.9745 : Initial support at 1.9728 (Aug 1 low) followed by 1.9650 (July 7 low). Initial resistance is now at 1.9842 (Aug 1 high) followed by 1.9929 (July 31 high). Australian Dollar (AUD) Australian Dollar – 0.9290 : Initial support at 0.9276 (61.8% retrace 0.8953 to 0.9849) followed by 0.9206 (May 2 low). Initial resistance is now at 0.9419 (Aug 1 high) followed by 0.9476 (July 31 High). Gold (XAU) Gold – 910 : Initial support at 902.5 (Aug 1 low) followed by 894.5 (July 31 low). Initial resistance is now at 925.2 (July 31 high) followed by 935.30 (July 25 high).

Image Caption: Forex currency price chart of USD and JPY Image: Body: US Payrolls data mixed, Greenback finding support. U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) the much anticipated July Nonfarm Payrolls failed to impact the markets as the data came in mixed. Employment change of -51K was better than the -75K expected but the Unemployment rate notched up to 5.7% from 5.6% in June. Also released the July Manufacturing ISM beating expectations at 50 vs. 49.3 forecast. The USD on the whole was slightly better bid even as stocks weakened and Oil gained. In the U.S. share markets, the NASDAQ was down 14 points (-0.65%) and the Dow Jones was down -51 points (-0.45%). Crude Oil closed up $1.02 ending the New York session at $125.10 per barrel. Looking ahead, June Core PCE m/m expected at 0.2% and June Factory Orders seen at 0.7%. European Euro The Euro (EUR) was initially sold after US Jobs data but recovered as Oil moved higher. Also hurting sentiment was the June German Retail Sales down 1.4% vs. expectations of -0.5%. Overall the EUR/USD traded with a low of 1.5514 and a high of 1.5604 before closing the day at 1.5544 in the New York session. Looking ahead, June PPI forecast at 0.8% m/m and 7.9% y/y. Japanese Yen (JPY) The Japanese Yen (JPY) gained against most currencies as carry trades were unwound with only the USD remaining near opening levels. AUD/JPY and NZD/JPY continued to make new lows. Overall the USDJPY traded with a low of 107.28 and a high of 107.89 before closing the day around 107.69 in the New York session. Pound Sterling (GBP) The Sterling (GBP) was on the back foot as Manufacturing PMI fell to 44.3 in July and the USD was broadly bid. Ongoing concern about the UK economy heading into the MPC meeting weighed. Overall the GBP/USD traded with a low of 1.9729 and a high of 1.9841 before closing the day at 1.9735 in the New York session. Australian Dollar (AUD) The Australian Dollar (AUD) extended falls as the market speculation of rate cuts hit fever pitch. The RBA meets on Tuesday and is expected to hold rates at 7.25%. Overall the AUD/USD traded with a low 0.9293 and a high of 0.9417 before closing the US session at 0.9296. Gold Gold (XAU) continued to fall as the USD strengthened, unable to sustain gains on the back of a rally in Oil. Overall trading with a low of USD$902.90 and high of USD$916.90 ending the New York session at USD$910 an ounce. Technical Analysis: US Payrolls Data Mixed Euro (EUR) Euro – 1.5565 : Initial support at 1.5515 (Aug 1 low) followed by 1.5493 (June 30 low). Initial resistance is now located 1.5603 (Aug 1 high) at followed by 1.5710 (76.4% retracement of the 1.5303 to 1.6038 advance). Yen (JPY) Yen – 107.55 : Initial support is located at 107.29 (Aug 1 low) followed by 106.58 (July 25 low). Initial resistance is now at 107.91 (Aug 1 high) followed by 108.38 (Jul 31 high). Pound Sterling (GBP) Pound – 1.9745 : Initial support at 1.9728 (Aug 1 low) followed by 1.9650 (July 7 low). Initial resistance is now at 1.9842 (Aug 1 high) followed by 1.9929 (July 31 high). Australian Dollar (AUD) Australian Dollar – 0.9290 : Initial support at 0.9276 (61.8% retrace 0.8953 to 0.9849) followed by 0.9206 (May 2 low). Initial resistance is now at 0.9419 (Aug 1 high) followed by 0.9476 (July 31 High). Gold (XAU) Gold – 910 : Initial support at 902.5 (Aug 1 low) followed by 894.5 (July 31 low). Initial resistance is now at 925.2 (July 31 high) followed by 935.30 (July 25 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of AUD and USD Image: Body: US GDP Disappointed but Dollar Strong ahead of Non farm U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) was initially sold off after economic data disappointed but then strengthened during the US session to finish little changed ahead of today’s July Job announcement. US 2Q GDP came in at 1.9% while markets had been expecting a number in the region of 2.2-2.4%. Also soft, weekly Jobless Claims at 448K vs. expectations of 395K the highest report in 4 years. A pull back in Oil and Gold help support the bounce off day lows. In the U.S. share markets, the NASDAQ was down 4 points (-0.18%) and the Dow Jones was down -205 points (-1.78%). Crude Oil closed down $2.69 ending the New York session at $124.08 per barrel. Looking ahead, Non Farm Payrolls seen at -75K after -62K in June. Also released the July Manufacturing ISM seen at 49.3. European Euro The Euro (EUR) traded at day highs after the US GDP disappointed but was unable to maintain strength as reports out of the Eurozone suggest growth will also slow in Q2. European CPI ticked higher coming in at 4.1% in July from 4.0% in June. German Unemployment change can in at expectations at -20K. Overall the EUR/USD traded with a low of 1.5570 and a high of 1.5700 before closing the day at 1.5593 in the New York session. Looking ahead, German retail sales are seen at -0.5%. Japanese Yen (JPY) The Japanese Yen (JPY) pivoted the 108 level against the USD. Buoyed by general greenback strength but weighed down as equities slumped. AUD/JPY and NZD/JPY have been under pressure as commodities continue to head lower. Overall the USDJPY traded with a low of 107.57 and a high of 108.38 before closing the day around 107.89 in the New York session. Pound Sterling (GBP) The Sterling (GBP) tracked the Euro higher initially but reversed as Oil tracked lower and the USD strengthened. Poor Housing data from the Nationwide HPI m/m at -1.7% weighed. Overall the GBP/USD traded with a low of 1.9783 and a high of 1.9828 before closing the day at 1.9825 in the New York session. Looking ahead, July PMI Manufacturing seen at 45.5 down form 45.8 in June. Australian Dollar (AUD) The Australian Dollar (AUD) experienced more selling pressure after the June retails sales dropped -1.0% vs. expectations of a 0.2% gain. Supporting was the June Trade Balance coming in at a 400M surplus vs. a -253 Million deficit in May. The markets are focusing on the AUD after weak data prompted speculation of rate cutes. Overall the AUD/USD traded with a low 0.9404 and a high of 0.9476 before closing the US session at 0.9420. Gold Gold (XAU) continued with recent volatility spiking as the US data surprised to the downside before broad based USD strength pared gains. Overall trading with a low of USD$907.90 and high of USD$925.20 ending the New York session at USD$914 an ounce. Technical Analysis: US GDP Disappointed Euro (EUR) Euro – 1.5570 : Initial support at 1.5569 (Jul 31 low) followed by 1.5521 (July 30 low). Initial resistance is now located 1.5710 (76.4% retracement of the 1.5303 to 1.6038 advance) at followed by 1.5758 (July 29 High). Yen (JPY) Yen – 107.80 : Initial support is located at 107.30 (July 29 low) followed by 106.58 (July 25 low). Initial resistance is now at 108.59 (Jun 16 high) followed by 109.71 (Jan 11 high). Pound Sterling (GBP) Pound – 1.9820 : Initial support at 1.9782 (July 31 low) followed by 1.9746 (July 30 low). Initial resistance is now at 1.9929 (July 31 high) followed by 1.999 (July 24 high). Australian Dollar (AUD) Australian Dollar – 0.9380 : Initial support at 0.9328 (Jun 12 low) followed by 0.9276 (May 2 low ). Initial resistance is now at 0.9476 (July 31 high) followed by 0.9528 (July 30 low). Gold (XAU) Gold – 911 : Initial support at 908 ( July 31 low) followed by 894.5 (July 30 low). Initial resistance is now at 925.2 (July 31 high) followed by 935.30 (July 25 high) Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of XAU and USD Image: Body: ADP jobs surprise helps the Dollar fight Oil’s Rally U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) had a positive day consolidating the gains made on Tuesday. A surprising Jump in the ADP employment report for July coming in +9K vs. expectations of -60K set the mood on Wall St. Also supporting the markets was the decision to extend the FED Primary Dealer Credit Facility until Jan 30. A fall in US crude inventories lead to a sharp rally in Oil and capped the USD gains. In the U.S. share markets, the NASDAQ was up 10 points (0.44%) and the Dow Jones was up 186 points (1.63%). Crude Oil closed up $4.58 ending the New York session at $122.19 per barrel. Looking ahead, weekly Jobless claims seen at 395K and Advanced Q2 GDP seen at 2.2% up from 1.0% in Q1. European Euro The Euro (EUR) fell initially on the US data but rebounded to opening levels on a rally in Crude Oil . Eurozone Consumer Confidence came in weak as predicted at -20 dampening hopes of any more interest rate rises going into the future. Overall the EUR/USD traded with a low of 1.5522 and a high of 1.5617 before closing the day at 1.5580 in the New York session. Looking ahead, German Unemployment Change seen at -20K after -38K in June. Also released the July Inflation Report is forecasted to gain to 4.1% from 4.0% last month. Japanese Yen (JPY) The Japanese Yen (JPY) was sold as stocks gained and US data impressed but was little changed against most of the crosses as heavy falls in their respective majors capped any gains and the USD/JPY resistance at 108.30 held firm. July PMI Manufacturing gained slightly to 47 but is still well below the expansionary level above 50. Overall the USDJPY traded with a low of 107.70 and a high of 108.34 before closing the day around 108.10 in the New York session. Looking ahead, June Construction Orders. Pound Sterling (GBP) The Sterling (GBP) kept to a trading range with US data preceeding the day’s lows before recovering inline with the rally in Crude Oil. July GFK Consumer Confidence fell to -39 it’s lowest ever recorded with concerns of stagflation mounting. Overall the GBP/USD traded with a low of 1.9745 and a high of 1.9844 before closing the day at 1.9810 in the New York session. Australian Dollar (AUD) The Australian Dollar (AUD) fell in line with a plummeting Gold price and strengthening USD hitting month lows. Building Permits disappointed coming negative -0.7% vs. market expectations of +1.0%. Overall the AUD/USD traded with a low 0.9412 and a high of 0.9526 before closing the US session at 0.9435. Looking ahead, June Retails sales are seen at 0.2% down from 0.7% in May. Also released is the June Trade Balance seen as a surplus of 50 million up from a -965 Million deficit in May. Gold Gold (XAU) fell sharply to month lows breaking through supports at 910 and 900 before finally finding support and recovering on the back of the large gain in Oil. Overall trading with a low of USD$894 and high of USD$918.80 ending the New York session at USD$908 an ounce. Technical Analysis: Foreign Exchange Today Euro (EUR) Euro – 1.5575 : Initial support at 1.5493 (June 24 low) followed by 1.5476 (76.4% retracement of the 1.5303 to 1.6038 advance). Initial resistance is now located 1.5617 (July 30 high) at followed by 1.5758 (July 29 High). Yen (JPY) Yen – 108.10 : Initial support is located at 107.30 (July 29 low) followed by 106.58 (July 25 low). Initial resistance is now at 108.59 (Jun 16 high) followed by 109.71 (Jan 11 high). Pound Sterling (GBP) Pound – 1.9790 : Initial support at 1.9746 (July 30 low) followed by 1.9650 (July 7 low). Initial resistance is now at 1.9843 (July 24 high) followed by 1.999 (July 22 high). Australian Dollar (AUD) Australian Dollar – 0.9435 : Initial support at 0.9404 (Jun 18 low) followed by 0.9328 (Jun 12 reaction low). Initial resistance is now at 0.9528 (July 30 high) followed by 0.9590 (July 17 low). Gold (XAU) Gold – 908 : Initial support at 888.68 (76.4% retracement of the 858.00 to 988.00 advance) followed by 874.5 (Jun 25 low). Initial resistance is now at 919.6 (July 30 high) followed by 935.30 (July 25 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of GBP and USD Image: Body: US data leads rebound in US stocks and Greenback. U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) Strong US data lead to a bounce in the equity markets and a surge in the Greenback. Oil fell over $4 at one point as the USD strengthened also helping to keep stocks buoyant. The Case Schiller May House Price Index fell less than expected to -15.8% Y/Y and July Consumer Confidence improved slightly from 51.0 to 51.9. In the U.S. share markets, the NASDAQ was up 55.40 points (2.45%) and the Dow Jones was up 266 points (2.39%). Crude Oil closed down $2.54 ending the New York session at $122.19 per barrel. Looking ahead, July ADP Private Employment Change seen at -60K slightly better than the -79K surprise drop in June. European Euro The Euro (EUR) fell heavily as the US data was digested and the market pared EURO longs. The sharp fall in Oil and weakening EU economic data also weighed. Strong July German CPI of 3.3%Y/Y provided some support but as energy costs come off peaks some analysts suggest July’s reading could be a cycle high. Overall the EUR/USD traded with a low of 1.5553 and a high of 1.5758 before closing the day at 1.5590 in the New York session. Japanese Yen (JPY) The Japanese Yen (JPY) gained against most currencies except the USD which broke above 108 as US equities surged. Heavy falls in the EUR/USD and GPB/USD were too large to offset an increase in risk appetite. June Industrial Output was slightly weaker than forecast at -2% vs. market expectations of 1.7%. Overall the USDJPY traded with a low of 107.30 and a high of 108.30 before closing the day around 108.10 in the New York session. Pound Sterling (GBP) The Sterling (GBP) broke to the downside on woeful UK data released yesterday. June Mortgage Approvals fell to 36K with Total Lending falling to 4 billion from 5.1 Billion in May. It was the July CBI Orders that started the rout though falling to -36 from -9 in June. Market’s had been expecting a much tamer -15 and confirms that UK Retails Sales are plummeting justifying the record drop seen in June Retail Sales. Overall the GBP/USD traded with a low of 1.9760 and a high of 1.9969 before closing the day at 1.9800 in the New York session. Australian Dollar (AUD) The Australian Dollar (AUD) weakened in sympathy with the sharp falls seen in commodities. Recent banking reports suggest the Australian Financial sector may not be as sound as once thought. AUD/JPY was able to trade steady though as risk appetite increased. Overall the AUD/USD traded with a low 0.9499 and a high of 0.9586 before closing the US session at 0.9520. Looking ahead, June Building Permits are seen up 1% recovering from a -6.5% drop last month. Gold Gold (XAU) Fell sharply as the USD strengthened and Oil dropped. Buoyant equities also weighed as safe haven flows decreased. Overall trading with a low of USD$914.80 and high of USD$933 ending the New York session at USD$919 an ounce. Technical Analysis: US Data Leads Euro (EUR) Euro – 1.5590 : Initial support at 1.5584 (61.8% retracement of the 1.5303 to 1.6038 advance) followed by 1.5476 (76.4% retracement of the 1.5303 to 1.6038 advance). Initial resistance is now located 1.5758 (July 29 high) at followed by 1.5769 (July 28 High). Yen (JPY) Yen – 108.10 : Initial support is located at 107.30 (July 29 low) followed by 106.58 (July 25 low). Initial resistance is now at 108.31 (Jun 29 high) followed by 108.59 (Jun 16 high). Pound Sterling (GBP) Pound – 1.9800 : Initial support at 1.9754 (July 11 low) followed by 1.9650 (July 7 low). Initial resistance is now at 1.9990 (July 24 high) followed by 2.0077 (July 22 high). Australian Dollar (AUD) Australian Dollar – 0.9520 : Initial support at 0.9477 (July 9 low) followed by 0.9451 (76.4% retracement of the 0.9328 to 0.9849 advance). Initial resistance is now at 0.9590 (July 17 low) followed by 0.9637 (July 24 low). Gold (XAU) Gold – 918 : Initial support at 912.9 (July 8 low) followed by 908.65 (Jun 19 low). Initial resistance is now at 935.3 (July 25 high) followed by 949.25 (July 23 high). Article with Image: Full Size Image occupying Whole width of Column

Image Caption: Forex currency price chart of AUD and USD Image: Body: Banking defaults hurt the Dollar and Stocks. U.S. Dollar Trading (USD) U.S. Dollar Trading (USD) gave into continued stock weakness as the market focused back on US Financials. With two more banks failing on Friday and Merrill Lynch reporting a new $5.7 Billion writedown the USD took on an offered tone. A gloomy IMF report did little to help stocks with the fund cautioning that it saw no bottom to the US Housing Market. In the U.S. share markets, the NASDAQ down 46 points (-2.00%) and the Dow Jones was down 239 points (-2.11%). Crude Oil closed up $1.47 ending the New York session at $124.73 per barrel. Lookinh ahead, the May case schiller house Price index is seen down -1% m/m and -16% y/y. July Consumer Confidence is expected to fall to 50 from 50.4 in June. European Euro The Euro (EUR) grinded higher but moves were muted as the market waits for economic data later in the week. A Nigerian rebel attack on Oil pipe lines helped to lift Crude Oil which in turn supported the Euro. Recent poor Eurozone data has reignited the decoupling debate with the Eurozone now seen following the US into a period of slow growth. German Consumer confidence fell to 2.1 in August vs. expectations of 3.5. Overall the EUR/USD traded with a low of 1.5684 and a high of 1.5768 before closing the day at 1.5744 in the New York session. Japanese Yen (JPY) The Japanese Yen (JPY) traded in tight range gaining slightly as stocks continued to weaken but strong buying on the crosses kept the USD/JPY contained. EUR/JPY continues to trade above 169 within striking distance of the critical 170 level. June Unemployment at 4.1% was slightly higher than the 4.0% expected. Japanese Retail Sales beat forecasts coming in positive 0.3% vs. forecasts of -0.2%. Overall the USDJPY traded with a low of 107.35 and a high of 108.08 before closing the day around 107.45 in the New York session. Pound Sterling (GBP) The Sterling (GBP) gained against a weakened USD recovering well from negative housing data released during the Asian session. GBP/JPY once again provided much needed support but also the EUR/GBP cross showed that the Pound strength was broad based. Overall the GBP/USD traded with a low of 1.9840 and a high of 1.9965 before closing the day at 1.9945 in the New York session. Looking ahead, June Consumer Credit seen at 1.1 Billion down from 1.38 Billion in May along with July CBI orders expected to fall to -15 from -9 in June. June Mortgage data is released with Approvals expected at 37K down from 42K in May and total lending expected to dip to 3.85Bln from 4.07Bln in May. Australian Dollar (AUD) The Australian Dollar (AUD) traded in a tight range with the market contained to the 0.95 handle. Soft equities and the recent rout in commodities prices have kept AUD buyers on the sidelines for the time being. Overall the AUD/USD traded with a low 0.9527 and a high of 0.9595 before closing the US session at 0.9570 Gold Gold (XAU) gold traded higher but movements were muted as markets await key data later in the week. Overall trading with a low of USD$923.40 and high of USD$932.80 ending the New York session at USD$930 an ounce. Technical Analysis: Dollar And Stocks Hurt Euro (EUR) Euro – 1.5750 : Initial support at 1.5684 (July 28 low) followed by 1.5629 (July 24 low). Initial resistance is now located 1.5769 (July 24 high) at followed by 1.5799 (July 16 High). Yen (JPY) Yen – 107.45 : Initial support is located at 106.58 (July 25 low) followed by 106.06 (July 22 low). Initial resistance is now at 108.08 (Jun 28 high) followed by 108.59 (Jun 16 high). Pound Sterling (GBP) Pound – 1.9950 : Initial support at 1.9815 (July 14 low) followed by 1.9754 (July 11 low). Initial resistance is now at 1.9990 (July 24 high) followed by 2.0077 (July 22 high). Australian Dollar (AUD) Australian Dollar – 0.9580 : Initial support at 0.9527 (July 28 low) followed by 0.9477 (Jun 9 low). Initial resistance is now at 0.9637 (July 14 low) followed by 0.9675 (June 17 low). Gold (XAU) Gold – 932 : Initial support at 912.9 (July 8 low) followed by 908.65 (Jun 19 low). Initial resistance is now at 949.25 (July 23 high) followed by 976 (July 22 high). Article with Image: Full Size Image occupying Whole width of Column