India leads Global Rebound
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) experienced another day of rapid change in market mood to finish significantly weaker than the start of Asia. The change was led by an incredible post election rally in India of over 17% before being limited by the exchange. The rally sent risk currencies surging and dented the demand for USD and JPY. Crude Oil was up $2.10 a barrel to close at 59.80. In US share markets, the Nasdaq was up 52 points or 3.11% and the Dow Jones was up 235 points or 2.85%. Looking ahead, April Housing starts forecast at 0.52M vs. 0.51M previously.
European Euro
The Euro (EUR) found support at 1.3420 before rebounding on USD weakness to finish broadly supported. Comments from Weber that he doesn’t see positive growth until mid 2010 tempered enthusiasm for the single currency. Overall the EUR/USD traded with a low of 1.3422 and a high of .1.3565 before closing at 1.3555. Looking ahead, May German Zew Current Conditions forecast at -90 vs. -91.6 previously.
Japanese Yen (JPY)
The Japanese Yen (JPY) tested support under 95 Yen before the dramatic change of mood saw the Yen weaken so fast some commentators thought there was intervention happening. AUD/JPY surged to 73.50 from 70.50. USD/JPY broke above 96.20 to finish on a bullish footing. Overall the USDJPY traded with a low of 94.53 and a high of 96.48 before closing the day around 96.40 in the New York session. Looking ahead, March Industrial Output previously at 1.6%.
Pound Sterling (GBP)
The Sterling (GBP) was one of the biggest gainers on the improvement in risk appetite gaining against the EUR, USD and Yen to finish near month highs on all 3 pairs. May Rightmove House Prices increased 2.4%. GBP/JPY made large gains buoyed by the downgrade of Japans AAA debt. Overall the GBP/USD traded with a low of 1.5116 and a high of 1.5351 before closing the day at 1.5340 in the New York session. Looking ahead, April CPI forecast at 0.4% vs. 0.2%.
Australian Dollar (AUD)
The Australian Dollar (AUD) was possibly the most dramatic reversal of fortune with initial weakness turning into a short squeeze that ended less than 100 pips away from year highs at 0.7670. AUD/JPY and AUD/NZD both made good gains. Overall the AUD/USD traded with a low of 0.7450 and a high of 0.7670 before closing the US session at 0.7645. Looking ahead, RBA Governor Stevens Speaks about Australia and Canada. RBA minutes also released.
Gold
Gold (XAU) fell away as demand for the alternative investment faded as stocks surged.Overall trading with a low of USD$915 and high of USD$934 before ending the New York session at USD$918 an ounce.
Technical Analysis: GBP Made Large Gains As The Risk Appetite Improved
Euro (EUR)
Euro – 1.3560 : Initial support at 1.3343 (May 8 low) followed by 1.3247 (May 6 low). Initial resistance is now located at 1.3739 (March 19 high) followed by 1.3799 (Jan 8 high)
Yen (JPY)
Yen – 96.40 : Initial support is located at 94.15 (May 20 low) followed by 93.54 (Mar 19 low). Initial resistance is now at 96.69 (May 12 high) followed by 97.84 (May 11 high).
Pound Sterling (GBP)
Pound – 1.5340 : Initial support at 1.5061 (May 7 low) followed by 1.4944 (May 4 low). Initial resistance is now at 1.5373 (Jan 8 high) followed by 1.5477 (38.2% retrace 1.3503-1.8669).
Australian Dollar (AUD)
Australian Dollar – 0.7655 : Initial support at 0.7337 (May 6 low) followed by the 0.7233 (Apr 30 low). Initial resistance is now at 0.7668 (May 18 high) followed by 0.7738 (Oct 6 high).
Gold (XAU)
Gold – 918 : Initial support at 906 (May 8 low) followed by 895 (May 6 low). Initial resistance is now at 934.2 (May 15 high) followed by 945 (Mar 26 high).
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