US Stocks Plunge
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) found strength in Adversity as risk trades were pared back overnight. US stocks fell the most in 3 months on the first day of the quarter as data missed expectations. US September ISM manufacturing was at 52.6 vs. 54 forecast. Weekly Jobless claims at 550k vs. 530k previously. Market very nervous ahead of tonight's Non Farm Payrolls data. US Automakers showed a massive slump in sales during September as the Cash for Clunkers program ended. In US Stocks, DJIA -203 points closing at 9509, S&P -27 points closing at 1029 and NASDAQ -64 points closing at 2057. Looking ahead, September Non Farm Payrolls forecast at -180k vs. -216k previously and the Unemployment Rate forecast at 9.8% vs. 9.7% previously. August Factory orders are forecast at 0.3% vs. 1.3% previously.
European Euro
The Euro (EUR) fell at the start of Europe with a report that the EU would discuss the recent Euro appreciation. This added to recent comments about the weakness of the dollar. In the US session more selling was seen as risk aversion stepped up and the EUR/JPY fell back to 130 supports. 1.4500 has held so far. August German Retail Sales at -1.5% vs. 0.05 forecast. Overall the EUR/USD traded with a low of 1.4512 and a high of 1.4669 before closing at 1.4630. Looking ahead, August PPI forecast at 0.4% vs. 0.8%.
Japanese Yen (JPY)
The Japanese Yen (JPY) strengthened with risk aversion as US stocks plunged. Concerns about today's US employment data are fueling downside in AUD/JPY and GBP/JPY. Q3 Tankan Survey at -33 vs. -32 forecast helped to stabilize the market in Asia yesterday but traders did note that the average price forecast by big firms in Japan is 94 Yen not the current 89 Yen. Overall the USDJPY traded with a low of 89.63 and a high of 90.37 before closing the day around 90.15 in the New York session. UPDATE August Unemployment at 5.5% vs. 5.8% forecast.
Pound Sterling (GBP)
The Sterling (GBP) fell back on USD strength but gained against some of the other majors which fell more in percentage terms. GBP/AUD in particular found support close to 1.8000. Although cable did spend some of the day above 1.6000 resistance at 1.6030 held. Overall the GBP/USD traded with a low of 1.5889 and a high of 1.6025 before closing the day at 1.5930 in the New York session. Looking ahead, September Nationwide House Prices are forecast at 0.7% vs. 1.6% previously.
Australian Dollar (AUD)
The Australian Dollar (AUD) fell back heavily as the market was caught very long after fresh year highs above 0.8850. As US data shocked to the downside and stock losses mounted the pair pushed past support at 0.8760. Overall the AUD/USD traded with a low of 0.8674 and a high of 0.8859 before closing the US session at 0.8710.
Oil & Gold
Oil & Gold (XAU) bowed to USD strength slipping below $1000 but to little fanfare and price action was limited. Overall trading with a low of USD$997 and high of USD$1009 before ending the New York session at USD$999 an ounce. Shrugged off risk aversion to maintain $70 a barrel as Iran concerns mounted. Crude Oil was up $0.21 ending the New York session at $70.80.
Technical Analysis: Oil & Gold Slipped Below $1000
Euro (EUR)
Euro – 1.4535 : Initial support at 1.4527 (Sept 29 low) followed by 1.4467 (Sept 9 low). Initial resistance is now located at 1.4725 (Sept 25 high) followed by 1.4844 (September 23 high)
Yen (JPY)
Yen – 89.50 : Initial support is located at 88.24 (Sept 28 low) followed by 87.99 (Jan 23 low). Initial resistance is now at 90.51 (76.4% retrace 87.13-101.44) followed by 91.63 (Sept 24 high).
Pound Sterling (GBP)
Pound – 1.5935 : Initial support at 1.5771 (Sept 28 low) followed by 1.5691 (38.2% retrace 1.3503 - 1.7043). Initial resistance is now at 1.6207 (23.6% retrace 1.3503-1.7043) followed by 1.6468 (Sept 23 high).
Australian Dollar (AUD)
Australian Dollar – 0.8695 : Initial support at 0.8676 (Sept 29 low) followed by the 0.8587 (Sept 28 low). Initial resistance is now at 0.8943 (76.4% retrace 0.9850-0.6009) followed by 0.9130 (Aug 07 '08 high).
Gold (XAU)
Gold – 999 : Initial support at 985 (Sept 29 low) followed by 982 (Sept 10 low). Initial resistance is now at 1020 (Sept 22 high) followed by 1024 (September 17 high).
Oil
Oil – 70.30 : Initial support at 69.40 (Fib Support) followed by 68.00 (Fib Support). Initial resistance is now at 70.75 (Sept 30 high) followed by 72.05 (Sept 22 High).
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