U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) Fed Chairman Bernanke breached a rare topic commenting on the value of the Dollar, stating the Fed was “attentive” to import prices being raised by the falling dollar and signaling the easing of rates was over. As a consequence the greenback rallied considerably across the board helped by stronger April Factory Orders at 1.1% vs. 0.0% forecasted. In US share markets the NASDAQ was down 11 points (-0.44%) and the Dow Jones was down 100 points (-0.81%). Crude Oil closed down $3.46 ending the New York session at $124.30 per barrel. Looking ahead, Nonfarm Productivity expected at 2.5% and ADP Employment change expected at -30K.
European Euro
The Euro (EURO) traded higher initially in Europe after revised 1st quarter GDP was slightly higher than anticipated at 0.8% compared to provisional 0.7%. Bernanke’s pro Dollar comments sent the Euro into freefall pushing the single currency lower. Overall the EUR/USD traded with a low of 1.5410 and a high of 1.5628 before closing the day at 1.5445 in the New York session. Looking ahead, May Euro-zone Services PMI forecasted at 50.6 and April Retail Sales expected at 0.2%.
Japanese Yen (JPY)
The Japanese Yen (JPY) crept forward against most currencies on negative equities and rising risk aversion inspired by Lehman Brothers concerns. Fed Reserve comments proved more powerful though sending USDJPY back through the 105 level. Overall the USDJPY traded with a low of 103.87 and a high of 105.70 before closing the day around 105.05 in the New York session. Looking ahead, Q1 Capital spending expected in at -9.6%. UPDATE Q1 Capital spending made public at -4.9%
Pound Sterling (GBP)
The Sterling (GBP) had a volatile day trading higher inline with the Euro shrugging off a poor Construction PMI of 43.9 which indicated a recession in the UK housing sector. The Pound then fell in New York on the Fed chairman’s statement. Overall the GBP/USD traded with a low of 1.9607 and a high of 1.9741 before closing the day at 1.9630 in the New York session. Looking ahead, May UK services PMI due out forecasted at 50.4.
Australian Dollar (AUD)
The Australian Dollar (AUD) mixed day trading higher as April Building Approvals came in much stronger at 7.8% vs. -0.9 expected. The RBA held rates as expected at 7.25% but the accompanying statement was less hawkish than expected which pared Aussie gains. AUD/JPY was under pressure from the increase in risk aversion. Falling commodities coupled with US central bank rhetoric proved a bearish combination pushing the AUD to day lows in New York. Overall the AUDUSD traded with a low of 0.9509 and a high of 0.9613 before closing the day at 0.9526 in the New York session. Looking Ahead, Final GDP for the 1st Quarter expected out at 0.3%.
Gold
Gold (XAU) moved in line with the dollar gaining early but falling back on Bernanke’s comments. Overall trading with a low of $875.80 and high of $896.70 ending the New York session at $880 an ounce.
Technical Analysis: Oil And Gold Drop
Euro (EUR)
Euro – 1.5550 : Initial support at 1.5410 (76.4% retreacement of 1.5284 tp 1.5818) followed by 1.5367 (May 12 low). Initial resistance is now located 1.5628 (Jun 3 High) at followed by 1.5669 (May 29 high).
Yen (JPY)
Yen – 105.00 : Initial support is located at 103.88 (June 3 low) followed by 102.74 (May 22 low). Initial resistance is now at 105.57 (June 3 high) followed by 105.88 (May 29 high).
Pound Sterling (GBP)
Pound – 1.9625 : Initial support at 1.9597 (Jun 2 low) followed by 1.9555 (61.8% retracement 1.9363 to 1.9852). Initial resistance is now at 1.9741 (June 3 high) followed by 1.9816 (Jun 2 high)
Australian Dollar (AUD)
Australian Dollar – 0.9500 : Initial support a 0.943 (61.8% retracement 0.9291 to 0.9655) followed by 0.9392 (May 16 low). Initial resistance is now at 0.9614 (Jun 3 high) followed by 0.9639 (May 29 high).
Gold (XAU)
Gold – 880 : Initial support at 871.25 (May 30 low) followed by 860.5 (May 14 low). Initial resistance is now at 87.3 (Jun 2 high) followed by 909.85 (May 28 high).
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