Dow Jones down over 500 Points for 3rd time this week.

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gained against most of the majors after stocks slumped again and reversed some early USD weakness. Problems with GM credit lines sent market sentiment tumbling. Gold Jumped but oil slipped on the weakening economic outlook. One slight positive was the drop in Weekly Jobless Claims to 478K from 497K last week. In the U.S. share markets, the NASDAQ was down 95 points (-5.47%) and the Dow Jones was down 678 points (-7.33%). Crude Oil closed down -$2.36 ending the New York session at $86.59 per barrel. Looking Ahead, September Fed Budget expected at $70B vs. $112.9B previously. August International Trade Balance is expected at -58.8B vs. -62.2B.

European Euro

The Euro (EUR) continued to recover as sentiment and stocks gained in Europe but fell off again as US stocks crashed. Weak Oil and heavy EUR/JPY selling weighed. German Trade Balance gained to 13.1 Billion Surplus. Overall the EUR/USD traded with a low of 1.3580 and a high of 1.3743 before closing the day at 1.3610 in the New York session.

Japanese Yen (JPY)

The Japanese Yen (JPY) was sold during the Asian and European Session as the sentiment improved somewhat but things turned around in the US session as stocks slumped again and investors surged back into the safe haven. Weighing on the Market was that Japans UFJ bank may not invest in Morgan Stanley. Overall the USDJPY traded with a low of 98.99 and a high of 101.49 before closing the day around 99.75 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) came under pressure in the US session as waves of GBP/JPY selling led the pound towards the key 1.70 level. UK Nationwide House Prices fell -1.3% in September. Overall the GDP/USD traded with a low of 1.7152 and a high of 1.7395 before closing the day at 1.7198 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) staged the biggest recovery during the beginning of the day jumping over 400 points before running into a wall of offers above .7100 and then started to fall as US stocks plummeted. Australian Employment change was at expectations with a gain of 2.2K jobs and an increase in the unemployment rate to 4.3% from 4.1% in September. Opened the Asian session on a very weak footing. Overall the AUD/USD traded with a low of 0.6650 and a high of 0.7135 before closing the US session at 0.6900.

Gold

Gold (XAU) eased off the 900 level when risk sentiment moderated before surging back the key that level during the US session. Overall trading with a low of USD$882.20 and high of USD$882 before ending the New York session at USD$886 an ounce.

Technical Analysis: Dow Jones Down

Euro (EUR)

Euro – 1.3565 : Initial support at 1.3545 (Oct 8 low) followed by 1.3344 (Oct 6 low). Initial resistance is now located at 1.3786 (Oct 9 high) at followed by 1.3907 (Oct 3 high).

Yen (JPY)

Yen – 98.60 : Initial support is located at 97.68 (Mar 19 low) followed by 96.85 (Mar 18 low). Initial resistance is now at 101.69 (Oct 8 low) followed by 103.29 (Oct 7 high).

Pound Sterling (GBP)

Pound – 1.7020 : Initial support at 1.7000 (Psychological number) followed by 1.6904 (June 2003 low). Initial resistance is now at 1.7067 (Oct 9 low) followed by 1.7658 (Oct 7 high).

Australian Dollar (AUD)

Australian Dollar – 0.6695 : Initial support at 0.6631 (Oct 9 low) followed by the 0.6437 (Oct 8 low). Initial resistance is now at 0.7148 (Oct 8 high) followed by 0.7355 (Oct 7 high).

Gold (XAU)

Gold – 923 : Initial support at 856.7 (Oct 8 low) followed by 820 (Oct 3 low). Initial resistance is now at 925 (Oct 9 high) followed by 935 (July 25 high).

Coordinated Worldwide Emergency Interest Rate Cuts

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) in an extreme move central banks around the world cut rates in a coordinated fashion to try and restore some confidence in the markets. With the Nikkei down 10% and European stocks following the lead the bold move did stem the selling for a short while. The bounce was brief though and stocks resumed their downtrend to end in the red. The USD lost heavily against safe haven currencies and gold but was able to make gains against higher yielding pairs. Fed Funds Rates cut to 1.50% from 2.00%. In the U.S. share markets, the NASDAQ was down 14 points (-0.83%) and the Dow Jones was down -189 points (-2.00%). Crude Oil closed down +$1.11 ending the New York session at $88.95 per barrel. Looking Ahead, weekly jobless claims are expected to moderate at 475K vs. 497K previously.

European Euro

The Euro (EUR) received a boost from the EU 0.5% rate cut to 3.75% from 4.25% as markets risk appetite picked up large amounts of EUR/JPY was bought. Stocks were unable to maintain gains though and the Euro fell back from highs. German Industrial production jumped to 3.4% after stronger factory orders on Tuesday. Overall the EUR/USD traded with a low of 1.3544 and a high of 1.3743 before closing the day at 1.3640 in the New York session. Looking ahead, August German Import prices -4%.

Japanese Yen (JPY)

The Japanese Yen (JPY) was the main winner as USD/JPY broke below 100 and all the crosses came under severe pressure as the Nikkei lost 10%. Coordinated rate cuts did provide some support but this proved fleeting and the Yen finished the day on a strong footing but somewhat overbought. Overall the USDJPY traded with a low of 98.60 and a high of 101.70 before closing the day around 101.60 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) traded in a volatile fashion with multiple factors affecting price action. The UK announced a major $350 Billion bank rescue passage. This was quickly overshadowed by coordinated global rate cuts. UK cut rates 0.5% to 4.5% from 5.0%. The GBP recovered with stocks but was very weak going into the US close as stocks capitulated. Overall the GDP/USD traded with a low of 1.7275 and a high of 1.7660 before closing the day at 1.7520 in the New York session. Looking ahead, August trade balance expected at -7.6B.

Australian Dollar (AUD)

The Australian Dollar (AUD) was ripped apart from a huge sell order out of the US. The AUD broke below 70 and didn’t stop until the low 64’s. A brief recovery was seen on the Interest rate announcement but the mood is grossly bearish and breaking records for the size and scope of the moves. Overall the AUD/USD traded with a low of 0.6439 and a high of 0.7156 before closing the US session at 0.6711. Looking ahead, September Employment change expected at 0 and the unemployment rate expected to edge higher to 4.3% from 4.1%.

Gold

Gold (XAU) broke above $900 as risk aversion soared on crashing markets. Investors are flocking into the precious metal. Overall trading with a low of USD$920 and high of USD$879.90 before ending the New York session at USD$909 an ounce.

Technical Analysis: Interest Rate Cuts

Euro (EUR)

Euro – 1.3615 : Initial support at 1.3361 (Aug 16 2006 low) followed by 1.3319 (61.8% retrace 1.1639 to 1.6038). Initial resistance is now located at 1.3773 (Oct 6 high) at followed by 1.3907 (Oct 3 high).

Yen (JPY)

Yen – 99.80 : Initial support is located at 98.57 (Mar 23 low) followed by 97.68 (Mar 19 low). Initial resistance is now at 103.39 (Oct 7 low) followed by 105.43 (Sept 29 high).

Pound Sterling (GBP)

Pound – 1.7235 : Initial support at 1.7231 (Mar 2006 low) followed by 1.7131 (Dec 2005 low). Initial resistance is now at 1.772 (Oct 6 high) followed by 1.7839 (Oct 3 high).

Australian Dollar (AUD)

Australian Dollar – 0.6675 : Initial support at 0.6450 (Oct 8 low) followed by the 0.6342 (Sep 03 2003 low). Initial resistance is now at 0.7157 (Oct 8 high) followed by 0.7355 (Oct 7 high).

Gold (XAU)

Gold – 909 : Initial support at 856.7 (Oct 8 low) followed by 820 (Oct 3 low). Initial resistance is now at 921.31 (Oct 8 high) followed by 925 (Sep 29 high).

Markets Plunge for a second day ignoring Bernanke Rate Cut Hint

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gave up some of the recent gains seen on Monday as Federal Reserve Chief Bernanke hinted at future rate cuts given the recent market deterioration. Consumer Credit M/M fell -7.9B vs. +5.6B forecast. Bernanke also noted that the ‘outlook to growth has worsened’ and this sent stocks tumbling lower. In the U.S. share markets, the NASDAQ was down -108.08 points (-5.11%) and the Dow Jones was down -508 points (-5.11%). Crude Oil closed up +$2.25 ending the New York session at $90.06 per barrel. Looking Ahead, August Pending Homes Sales expected at -1.5%.

European Euro

The Euro (EUR) recovered off recent lows as the market saw the selling overdone. The rally in Oil helped the Euro as did some steady buying in EUR/JPY before stocks crashed again removing that support. German Industrial Orders jumped unexpectedly to 3.6% from -1.4% previously. Overall the EUR/USD traded with a low of 1.3481 and a high of 1.3743 before closing the day at 1.3620 in the New York session. Looking ahead, German Industrial Output is expected at -0.1% vs. -1.8%.

Japanese Yen (JPY)

The Japanese Yen (JPY) came off highs when the RBA cut rates -1.0% and equities pared their losses. The bounce continued into Europe but as equities turned negative so did the crosses and the yen gained across the board. As US stocks dropped 5% risk aversion reared its head and the Yen has been the safe haven of choice. The Bank of Japan held rates at 0.5% although there was mention of downside risks to growth. Overall the USDJPY traded with a low of 101.06 and a high of 103.30 before closing the day around 101.60 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) recovered from year lows seen on Monday as bargain hunters jumped in and USD gave up some of its gains. Bernanke also gave the pound a boost as he reopened the door on US rate cuts with his speech late in the US session. Heavy GBP/JPY selling capped gains in the US close. Overall the GDP/USD traded with a low of 1.7320 and a high of 1.7660 before closing the day at 1.7520 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) had an extremely volatile day with the market gaining off the extreme reaction lows on Monday. The RBA slashed rates by 1% and sparked a knee jerk 2 cent sell off before regaining 3 cents on improved risk sentiment. Later in the US session as stocks reversed direction the AUD was pushed back to lows. Overall the AUD/USD traded with a low of 0.7000 and a high of 0.7355 before closing the US session at 0.7100. Looking ahead, Consumer Sentiment previously at 7%.

Gold

Gold (XAU) continued to make gains as US stocks hit new multi year lows and risk aversion spiked higher. Overall trading with a low of USD$857.95 and high of USD$890.50 before ending the New York session at USD$889 an ounce.

Technical Analysis: Markets Plunge For A Second Day

Euro (EUR)

Euro – 1.3575 : Initial support at 1.3361 (Aug 16 2006 low) followed by 1.3319 (61.8% retrace 1.1639 to 1.6038). Initial resistance is now located at 1.3773 (Oct 6 high) at followed by 1.3907 (Oct 3 high).

Yen (JPY)

Yen – 101.50 : Initial support is located at 100.24 (Oct 6 low) followed by 100 (Key level). Initial resistance is now at 105.43 (Oct 6 high) followed by 106.96 (Sept 29 high).

Pound Sterling (GBP)

Pound – 1.7470 : Initial support at 1.7231 (Mar 2006 low) followed by 1.7131 (Dec 2005 low). Initial resistance is now at 1.772 (Oct 6 high) followed by 1.7839 (Oct 3 high).

Australian Dollar (AUD)

Australian Dollar – 0.7090 : Initial support at 0.6990 (Oct 6 low) followed by the 0.7676 (June 2004 low). Initial resistance is now at 0.7743 (Oct 6 high) followed by 0.7818 (Oct 3 high).

Gold (XAU)

Gold – 883 : Initial support at 820 (Oct 3 low) followed by 808.82 (61.8% retrace 737.00 to 925.00). Initial resistance is now at 893 (Oct 1 high) followed by 914.75 (Sep 30 high).

Another Black Monday Stock crash, AUD Plummets

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) with sentiment souring over the weekend Monday was always going to be a negative event. The market didn’t disappoint with a record plunge in the Dow Jones causing mayhem in Commodities and FX markets. Huge deleveraging saw carry trades and commodities sharply lower. As a result the USD was a major winner during the day. In the U.S. share markets, the NASDAQ was down -84 points (-4.34%) and the Dow Jones was down 369 points (-3.58%). Crude Oil closed down -$6.07 ending the New York session at $87.81 per barrel. Looking Ahead, August Consumer Credit forecast at 5.2B vs. 4.6B.

European Euro

The Euro (EUR) was hard hit as banking troubles ravaged sentiment. Also weighing were conflicting political views on how to fix the EU banking system. Germany announced that all bank deposits would be guaranteed. October Sentix was at expectations at -27.8. The large drop in Oil also weighed. Overall the EUR/USD traded with a low of 1.3444 and a high of 1.3730 before closing the day at 1.3500 in the New York session. Looking ahead, August German Industrial Orders are seen -0.1% vs. 17% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) was the biggest gainer in the market turmoil, surging against all currencies. AUD/JPY was especially hard hit, off over 10% on the day. USD/JPY challenged 100 but this critical level held. EUR/JPY and GBP/JPY all hit multiyear lows. Overall the USDJPY traded with a low of 100.22 and a high of 105.50 before closing the day around 101.80 in the New York session. Looking ahead, BOJ interest rate decision.

Pound Sterling (GBP)

The Sterling (GBP) came under pressure from heavy GBP/JPY selling and a flight into the USD. As stocks crashed fresh 2 year lows on the cable were hit. EUR/GBP selling supported. Overall the GDP/USD traded with a low of 1.7559 and a high of 1.7839 before closing the day at 1.7715 in the New York session. Looking ahead, August Industrial Output seen down -0.2% and Manufacturing Production -0.2%.

Australian Dollar (AUD)

The Australian Dollar (AUD) was the worse hit currency dropping over 11% in the AUD/JPY and 5 cents against the USD. Large drops in Commodities and speculation of aggressive rate cuts from the RBA combined with risk aversion for a perfect storm. Overall the AUD/USD traded with a low of 0.6990 and a high of 0.7735 before closing the US session at 0.7215. looking ahead, RBA rate announcement widely expected to be a 0.5% cut to 6.5% from 7.0%

Gold

Gold (XAU) gained over $30 as safe haven flows overcame the USD strength and investors fled to the precious metal. Overall trading with a low of USD$827.40 and high of USD$875.50 before ending the New York session at USD$860 an ounce.

Technical Analysis: AUD Plummets

Euro (EUR)

Euro – 1.3510 : Initial support at 1.3361 (Aug 16 2006 low) followed by 1.3319 (61.8% retrace 1.1639 to 1.6038). Initial resistance is now located at 1.3773 (Oct 6 high) at followed by 1.3907 (Oct 3 high).

Yen (JPY)

Yen – 101.95 : Initial support is located at 100.24 (Oct 6 low) followed by 100 (Key level). Initial resistance is now at 105.43 (Oct 6 high) followed by 106.96 (Sept 29 high).

Pound Sterling (GBP)

Pound – 1.7435 : Initial support at 1.7231 (Mar 2006 low) followed by 1.7131 (Dec 2005 low). Initial resistance is now at 1.772 (Oct 6 high) followed by 1.7839 (Oct 3 high).

Australian Dollar (AUD)

Australian Dollar – 0.7210 : Initial support at 0.6990 (Oct 6 low) followed by the 0.7676 (June 2004 low). Initial resistance is now at 0.7743 (Oct 6 high) followed by 0.7818 (Oct 3 high).

Gold (XAU)

Gold – 862 : Initial support at 820 (Oct 3 low) followed by 808.82 (61.8% retrace 737.00 to 925.00). Initial resistance is now at 876 (Oct 2 high) followed by 893.25 (Oct 1 high).

Bailout Plan soured by weak Non Farm Payrolls

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was able to make gains against a broad range of currencies even as US Jobs data weakened. September Nonfarm Payrolls were -159K vs. -100K forecast and -73K in August. Also drawing attention was the passing of the US Bailout plan that caused a brief rally in stocks. The rally was short-lived however as traders focused back on the weakening fundamentals and stocks reversed a 300 point rally to end down 150. In the U.S. share markets, the NASDAQ was down -29 points (-1.48%) and the Dow Jones was down 157 points (-1.50%). Crude Oil closed down -$0.09 ending the New York session at $93.88 per barrel.

European Euro

The Euro (EUR) the Euro was unable to take advantage of the weak US data as Europe’s banking problems took precedence. Fortis, Hypo and Dexia banks all required immediate funding and this helped the Euro to weaken into the weekend. August Sales were better than expected at +0.3% vs. 0.1% forecast. Overall the EUR/USD traded with a low of 1.3702 and a high of 1.3905 before closing the day at 1.3780 in the New York session. Looking ahead, October Sentix is seen at -27 vs. 20.2 previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) was initially sold as the Bailout plan was passed and stocks surged. As sentiment reversed though, the Yen gained against all majors going into the weekend. The EUR/JPY was especially weak. Overall the USDJPY traded with a low of 104.50 and a high of 106.15 before closing the day around 105.30 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) tracked the Euro lower as the USD strengthened and UK banking sector was also put under the spotlight. September Services were weaker than expected at 46 vs. 48 expected. Overall the GDP/USD traded with a low of 1.7559 and a high of 1.7839 before closing the day at 1.7715 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) suffered considerable as risk aversion spiked and stocks slumped to multi year lows in the US. Expectations of aggressive easing from the RBA added to the bearish tone. AUD/NZD traded at multi month lows. Overall the AUD/USD traded with a low of 0.7713 and a high of 0.7814 before closing the US session at 0.7740.

Gold

Gold (XAU) couldn’t gain on increased risk aversion and remained weak into the US close as the USD strengthened. Overall trading with a low of USD$820.70 and high of USD$846.70 before ending the New York session at USD$835 an ounce.

Technical Analysis: Bailout Plan Soured

Euro (EUR)

Euro – 1.3680 : Initial support at 1.3663 (Sep 07 2007 low) followed by 1.3551 (Sept 04 low). Initial resistance is now located at 1.3907 (Oct 3 high) at followed by 1.4025 (Oct 2 high).

Yen (JPY)

Yen – 105.00 : Initial support is located at 104.51 (Oct 3 low) followed by 103.50 (Sept 30 low). Initial resistance is now at 106.96 (Sep 29 high) followed by 107.02 (Sept 25 high).

Pound Sterling (GBP)

Pound – 1.7675 : Initial support at 1.7544 (Sept 12 low) followed by 1.7447 (Sep 11 low). Initial resistance is now at 1.7875 (Oct 1 high) followed by 1.7978 (38.2% retrace 1.8668 to 1.7555).

Australian Dollar (AUD)

Australian Dollar – 0.7730 : Initial support at 0.7700 (Oct 2 low) followed by the 0.7676 (Sept 17 2007 low). Initial resistance is now at 0.7818 (Oct 3 high) followed by 0.7944 (Oct 2 high).

Gold (XAU)

Gold – 836 : Initial support at 820 (Oct 3 low) followed by 808.82 (61.8% retrace 737.00 to 925.00). Initial resistance is now at 847 (Oct 3 high) followed by 876 (Oct 2 high).

Focus on weakening Economic Fundamentals sends stocks crashing

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) the boost received from the Senate passing the Bailout bill was short lived with the market sending stocks spiraling lower as focus turned back to the larger economy as a whole. Weekly Jobless Claims increased to 497K from 493K previously. Also weak, August Factory Orders falling -4% vs. -3% forecast. Concerns of a global slowdown sent commodities lower and helped buoy the USD to year highs. In the U.S. share markets, the NASDAQ was down -92 points (-4.48%) and the Dow Jones was down 348 points (-3.22%). Crude Oil closed down -$4.56 ending the New York session at $93.97 per barrel. Looking ahead, Nonfarm Payrolls are seen -100K vs. -84K previously. The Unemployment rate in September is expected to remain at 6.1%. Also released September Non Manufacturing ISM forecast at 50 vs. 50.6 previously.

European Euro

The Euro (EUR) broke below year lows as Trichet released some dovish comments on the direction of future European Interest rates which the ECB held at 4.25%. Also broken last night was the long term trend line at 1.3925. Large losses in Oil also weighed. Overall the EUR/USD traded with a low of 1.3747 and a high of 1.4040 before closing the day at 1.3800 in the New York session. Looking ahead, Retail Sales in August are expected at 0.1% vs. -0.4% previously. Also release the Eurozone PMI services seen at 48.2.

Japanese Yen (JPY)

The Japanese Yen (JPY) strengthened across the board and also against the surging USD as risk aversion spiked higher in the Asian and US sessions. The EUR/JPY was the biggest hit as it weakened considerable breaking below key support at 147. Overall the USDJPY traded with a low of 105.10 and a high of 106.29 before closing the day around 105.80 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) weakened against the USD but losses were not as bad as the Euro. UK data was weak but near expectations at -1.7%. UK Construction PMI fell further to 38.8 and is at a very low level well below the 50 contractionary level. Overall the GDP/USD traded with a low of 1.7552 and a high of 1.7729 before closing the day at 1.7640 in the New York session. Looking ahead, September PMI Services seen slightly lower at 48 vs. 49.2.

Australian Dollar (AUD)

The Australian Dollar (AUD) took the full brunt of the USD strength last night. Weakening Global Growth outlook and softening commodities combined with risk aversion to send the Aussie to new year lows below .7800. AUD/JPY also suffered considerable. Overall the AUD/USD traded with a low of 0.7698 and a high of 0.7945 before closing the US session at 0.7740.

Gold

Gold (XAU) Gold also tracked lower against the USD as large falls in Oil took its toll. Increased risk aversion failed to translate into safe-haven buying.. Overall trading with a low of USD$831.20 and high of USD$874.10 before ending the New York session at USD$837 an ounce.

Technical Analysis: Stocks Crashing

Euro (EUR)

Euro – 1.3785 : Initial support at 1.3748 (Oct 2 low) followed by 1.3663 (Sept 07 low). Initial resistance is now located at 1.4032 (Oct 2 high) at followed by 1.4174 (Oct 1 high).

Yen (JPY)

Yen – 105.20 : Initial support is located at 103.50 (Sept 30 low) followed by 102.57 (May 12 low). Initial resistance is now at 106.96 (Sep 29 high) followed by 107.02 (Sept 25 high).

Pound Sterling (GBP)

Pound – 1.7625 : Initial support at 1.7544 (Sept 12 low) followed by 1.7447 (Sep 11 low). Initial resistance is now at 1.8118 (Sep 30 high) followed by 1.8445 (Sep 29 High).

Australian Dollar (AUD)

Australian Dollar – 0.7725 : Initial support at 0.7715 (Oct 2 low) followed by the 0.7676 (Sept 17 2007 low). Initial resistance is now at 0.7944 (Oct 2 high) followed by 0.8097 (Sept 30 high).

Gold (XAU)

Gold – 871 : Initial support at 825 (Sep 19 low) followed by 772 (Sep 16 low). Initial resistance is now at 893.69 (Sep 29 high) followed by 914.9 (Sept 30 high).

Weak US data but Strong USD ahead of Senate Bailout Vote

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) continued to be well supported as Oil fell and US Jobs data beat expectations. The September ADP Unemployment report showed -8K vs. -55K expected job losses. Other US data was very weak though with the September Manufacturing ISM showing a shock fall to 43.5 vs. 49.5 forecast. In the U.S. share markets, the NASDAQ was down -22 points (-1.07%) and the Dow Jones was down 19 points (-0.18%). Crude Oil closed down -$2.11 ending the New York session at $98.53 per barrel. Looking ahead, Weekly jobless claims seen at 475K vs. 493K previously. Also released the August Factory Orders are seen -2.5% vs. 1.4% previously.

European Euro

The Euro (EUR) started to fall in Europe coming off its day highs as markets sought a retest of the 1.40 level and Oil came off over $2 on increased supply. EU data was mixed with German Retail Sales gaining 3.1% M/M and August Eurozone Unemployment increasing to 7.5%. Overall the EUR/USD traded with a low of 1.3975 and a high of 1.4175 before closing the day at 1.4015 in the New York session. Looking ahead, EU PPI expected at -0.5% vs. 1.1%. The ECB meets today and is expected to hold interest rates at 4.25%. There is some chance of a cut given recent market turbulence.

Japanese Yen (JPY)

The Japanese Yen (JPY) strengthened on sluggish stocks and falling crosses. Some attention given to Buffet investing in a GE capital raising and concerns that this shows the level of funding constraints that such a company would need to raise funds. The Q2 Tankan Survey came in Negative -3 vs. 5 previously. Overall the USDJPY traded with a low of 105.33 and a high of 106.54 before closing the day around 105.80 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) came under pressure again as USD strengthened and Data continued to be dreadful. September Manufacturing PMI came in at 41.0 vs. 45.0 expected. Calls for Rate cuts in the UK are getting louder also hurting GBP sentiment. Overall the GDP/USD traded with a low of 1.7635 and a high of 1.7878 before closing the day at 1.7720 in the New York session. Looking ahead, Nationwide House Prices are expected at -1.6% in September.

Australian Dollar (AUD)

The Australian Dollar (AUD) rallied during the Asian session as Stocks were positive but also succumbed to USD strength in the US session as Oil and Gold were heavy. Also of note is the weakness of AUD/NZD in recent sessions breaking key levels to the downside. This suggests broad AUD weakness in the market and is a good measure of the lack of investor confidence right now. Overall the AUD/USD traded with a low of 0.7869 and a high of 0.8020 before closing the US session at 0.7880. Looking ahead, August Trade Balance is seen +300M vs. -717M previously.

Gold

Gold (XAU) gained on terrible US manufacturing data but fell into the US close on broad based USD strength and falling Oil. Overall trading with a low of USD$865 and high of USD$892 before ending the New York session at USD$872 an ounce.

Technical Analysis: Weak US Data

Euro (EUR)

Euro – 1.4020 : Initial support at 1.3973 (Sept 12 low) followed by 1.3882 (Sept 11 low). Initial resistance is now located at 1.4302 (former support) at followed by 1.4435 (Sept 30 high).

Yen (JPY)

Yen – 105.80 : Initial support is located at 103.50 (Sept 16 low) followed by 102.57 (May 12 low). Initial resistance is now at 106.96 (Sep 29 high) followed by 107.02 (Sept 25 high).

Pound Sterling (GBP)

Pound – 1.7710 : Initial support at 1.7544 (Sept 12 low) followed by 1.7447 (Sep 11 low). Initial resistance is now at 1.8118 (Sep 30 high) followed by 1.8445 (Sep 29 High).

Australian Dollar (AUD)

Australian Dollar – 0.7910 : Initial support at 0.7802 (Sept 17 low) followed by the 0.7676 (Aug 17 2007 low). Initial resistance is now at 0.8097 (Sept 30 high) followed by 0.8348 (Sept 29 high).

Gold (XAU)

Gold – 871 : Initial support at 860 (Sept 30 low) followed by 844 (Aug 28 low). Initial resistance is now at 925.1 (Sep 29 high) followed by 935 (July 25 high).

US Bailout the Currently the Focus

Last week’s Currency Trading Review

The Dollar waxed and waned with market enthusiasm for the US Government’s 700 Billion Bailout package. Markets were very hopeful of the plan being passed by congress on Monday. On The data front we had the GDP downgraded to 2.8% from 3.3% in the Q2. Also downgraded, Personal Consumption Growth to 1.2% from 1.7%. The Euro tested highs on Monday but came off for the rest of the weak as the USD strengthened. Helping the Euro to come off highs was the disappointing result in the German IFO for September at 92.9. Eurozone PMI’s showed a further deterioration to 48.2 for services and Manufacturing at 45.3. Also Dropping, Gfk German Consumer Confidence Index dropping to 1.5 from 1.8 previously. The EUR/USD gained 1.01% closing at 1.4611 after opening at 1.4464. The Japanese Yen was little changed so gained against most currencies as market uncertainty. Significant falls were seen in all crosses and USD/JPY traded in a tight range. Japan Core CPI remained steady at 2.4% in August. The USD/JPY fell 1.31% closing at 106.03, after opening the week at 107.42. The GBP rebounded to 1.8500 and remained at these relatively elevated levels for most the week before ending weaker as USD strengthened into the weekend. UK data was mixed with Rightmove House prices dropping 1% M/M and the CBI realized sales improving to -27 from -46. The GBP/USD gained 0.74% closing at 1.8449 after opening at 1.8312. The AUD remained at lofty heights as the USD and markets gave the Aussie a little reprieve and AUD/JPY jumped higher on plans to Bailout the US mortgage sector. Huge gains in Gold underpinned the movement. The AUD/USD closed down 0.23% at 0.8290 after opening at 0.8309.

For the week starting 28/04/08.

This Forex Trading Week Preview

In the States; Nonfarm Payrolls Week. On Wednesday we have ADP Unemployment change seen -55K vs. -33K in September. Also released the September ISM Manufacturing Index forcasted for a small decrease to 49.5 from 49.9. On Thursday we have Weekly Jobless claims expected to fall from last weeks spike high to 493K to 475K this week. Also on Thursday we have August Factory Orders down -2.5% vs. +1.3% previously. On Friday we have September ISM non manufacturing expected at 50 vs. 50.6. Non Farm Payrolls are expected at -100K vs. -84K last month. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Wednesday we have Eurozone Unemployment in August expected to remain at 7.3%. On Thursday we have the ECB interest rate decision and this could result in a unexpected cut to 4.00% given the recent market turbulence. On Friday we end the week with September retail sales forecast at 0.1% In the UK; on Wednesday we have Manufacturing PMI forecast at 45 down from 45.9 in August. On Thursday we have Nationwide House Price Index seen -1.6% vs. -1.9% previously. Also released the BoE Credit Conditions Survey. On Friday we have September Service PMI at 48 vs. 49.2. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Wednesday we have the Q2 Tankan Survey expected to fall negative for the first time in 5 years forecast at -2 vs. 5 previously. We will provide our previews and reviews of these data releases in the daily summary.

In Australia; On Thursday we have August Trade Balance forecast at .26B vs. -0.72B in July. We will provide our previews and reviews of these data releases in the daily summary.

Technical Analysis: US Bailout

Euro (EUR)

Euro – 1.4520 : Initial support at 1.4555 (Sept 26 low) followed by 1.4437 (Sept 22 low). Initial resistance is now located at 1.4679 (Sept 26 high) at followed by 1.4768 (Sept 22 high).

Yen (JPY)

Yen – 106.40 : Initial support is located at 105.03 (Sept 26 low) followed by 103.54 (Sept 16 low). Initial resistance is now at 107.02 (Sep 25 high) followed by 107.47 (Sept 22 high).

Pound Sterling (GBP)

Pound – 1.8320 : Initial support at 1.8265 (Sept 26 low) followed by 1.8202 (38.2% retrace 1.7447 to 1.8668). Initial resistance is now at 1.8468 (Sep 26 high) followed by 1.8669 (Sep 25 High).

Australian Dollar (AUD)

Australian Dollar – 0.8310 : Initial support at 0.8240 (Sept 26 low) followed by the 0.8011 (Sep 19 low). Initial resistance is now at 0.8380 (Sept 26 high) followed by 0.8469 (Sept 23 high).

Gold (XAU)

Gold – 872 : Initial support at 865.4 (Sept 25 low) followed by 825.12 (Sept 19 low). Initial resistance is now at 912.5 (Sep 26 high) followed by 919 (Sept 18 high).

Stocks recover and Dollar Surges on European bailouts

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gained heavily today posting one of its biggest one day advances as markets focused on other economies and equities rebounded. US data also supported with weakness in the Case-Schiller Home Prices Index at -16.3% being overlooked and instead concentrated on improvements to Chicago PMI (56.7 vs. 53.5) and CB consumer Confidence (59.8 vs. 54.6). In the U.S. share markets, the NASDAQ was up 98 points (4.97%) and the Dow Jones was up 485 points (4.68%). Crude Oil closed up $4.27 ending the New York session at $100.64 per barrel. Looking ahead, ADP unemployment report seen at -60K in September and the Manufacturing ISM fairly steady at 49.5.

European Euro

The Euro (EUR) rumors of emergency rate cuts and focus on the European banking sector sent the Euro tumbling. End of Quarter USD demand added to the downside moves. European CPI was confirmed as expected at 3.6% in September and German Unemployment fell -29K vs. -15 K expected in September. Overall the EUR/USD traded with a low of 1.4008 and a high of 1.4433 before closing the day at 1.4090 in the New York session. Looking ahead, September Eurozone Manufacturing PMI is seen at 45.3 vs. 47.6 previously. Also released German Retail Sales seen +0.5% vs. -1% in August.

Japanese Yen (JPY)

The Japanese Yen (JPY) came off considerable as equities reversed course and the USD/JPY jumped over 200 pips. Unemployment was confirmed at 4.1% in August. Quite surprisingly there was no capitulation in the crosses which one would have expected given the stock market crash. Overall the USDJPY traded with a low of 103.50 and a high of 106.52 before closing the day around 106.05 in the New York session. Looking ahead, Q2 Tanken Survey expected at -2 vs. 5 in Q1.

Pound Sterling (GBP)

The Sterling (GBP) tracked the Euro lower succumbing to the USD strength as well. Q2 GDP was confirmed at 0.0% and the Current account dropped to -11B vs. -9.7B expected. Overall the GDP/USD traded with a low of 1.7758 and a high of 1.8119 before closing the day at 1.7790 in the New York session. Looking ahead, September Manufacturing PMI seen slightly lower at 45 vs.45.9 previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) broke aggressively to the downside in the US session after staging a recovery off Asian lows going into the European session. Gold fell over $40 an ounce and talk of a possible 1% rate cut next Tuesday sent the AUD spirally lower. AUD/JPY held up quite well given the large turnaround in equities. Retail Sales were quite solid at +0.3% in August. Overall the AUD/USD traded with a low of 0.7859 and a high of 0.8097 before closing the US session at 0.7925.

Gold

Gold (XAU) came off the $900 handle and fell quickly to $860 supports as USD strengthened and credit fears eased. Overall trading with a low of USD$857.20 and high of USD$908.05 before ending the New York session at USD$871 an ounce

Technical Analysis: Stocks Recover

Euro (EUR)

Euro – 1.4110 : Initial support at 1.4008 (Sept 30 low) followed by 1.3974 (Sept 12 low). Initial resistance is now located at 1.4426 (Sept 30 high) at followed by 1.4679 (Sept 29 high).

Yen (JPY)

Yen – 104.35 : Initial support is located at 103.50 (Sept 16 low) followed by 102.57 (May 12 low). Initial resistance is now at 106.96 (Sep 29 high) followed by 107.02 (Sept 25 high).

Pound Sterling (GBP)

Pound – 1.7835 : Initial support at 1.7735 (Sept 16 low) followed by 1.7544 (Sep 12 low). Initial resistance is now at 1.8118 (Sep 30 high) followed by 1.8445 (Sep 29 High).

Australian Dollar (AUD)

Australian Dollar – 0.7925 : Initial support at 0.7802 (Sept 17 low) followed by the 0.7676 (Aug 17 2007 low). Initial resistance is now at 0.8097 (Sept 30 high) followed by 0.8348 (Sept 29 high).

Gold (XAU)

Gold – 872 : Initial support at 867.83 (Sept 29 low) followed by 865 (Sept 25 low). Initial resistance is now at 924.75 (Sep 29 high) followed by 935 (July 25 high).

BAILOUT REJECTED! MARKET CRASHS

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) in a massive shock to the markets the US Congress rejected the Bailout plan. Stocks crash around the world with Dow Jones dropping a record 700 points. The Fed responded by increasing swap lines to $620 Billion with other central banks. The dollar was immediately sold off but regained as markets freezed up and USD demand surged on safe haven flows. Core PCE Price Index up 0.2% at expectations. In the U.S. share markets, the NASDAQ was down 199 points (-9.14%) and the Dow Jones was down 777 points (-6.98%). Crude Oil closed down $10.52 ending the New York session at $96.37 per barrel. Looking ahead, Chicago PMI is seen down at 53.5 from 57.9 and CB Consumer Confidence is seen lower at 54.6 from 56.9.

European Euro

The Euro (EUR) traded significantly lower as a large European bank was bailed out. The Euro did receive a short term bounce as the US bailout was rejected. Huge USD repatriation flows were seen. Overall the EUR/USD traded with a low of 1.4303 and a high of 1.4635 before closing the day at 1.4400 in the New York session. Looking ahead, Eurozone Inflation is seen lower at 3.6% in September vs. 3.8% in August.

Japanese Yen (JPY)

The Japanese Yen (JPY) surged higher as markets crashed around the world. Reports of over 1 trillion was lost in worlds markets and JPY repatriation outpaced even the USD. Japanese August Retail Sales were +0.7%. Overall the USDJPY traded with a low of 105.03 and a high of 106.57 before closing the day around 106.05 in the New York session. Update Japanese Unemployment rate for August seen at 4.1%.

Pound Sterling (GBP)

The Sterling (GBP) broke to the downside in early European trading as Bradford and Bingley was seized and sold by the regulators. After the Bailout was rejected heavy GBY/JPY selling dragged the Pound towards 1.80. Overall the GDP/USD traded with a low of 1.7960 and a high of 1.8340 before closing the day at 1.8080 in the New York session. Looking ahead, Q2 GDP is seen flat at 0.0%.

Australian Dollar (AUD)

The Australian Dollar (AUD) was sold aggressively as stock losses mounted and the Bailout plan was rejected. Waves of AUD/JPY forced the AUD for a test of 0.8000 early in Asian trading. Overall the AUD/USD traded with a low of 0.8002 and a high of 0.8349 before closing the US session at 0.8030. August Retail Sales seen at 0.2% down from 1.4% in July.

Gold

Gold (XAU) surged higher as safe haven flows. Broke above $900 an ounce and closed above this key level. Overall trading with a low of USD$868.20 and high of USD$917 before ending the New York session at USD$906 an ounce.

Technical Analysis: Bailout Rejected

Euro (EUR)

Euro – 1.4375 : Initial support at 1.4302 (Sept 29 low) followed by 1.4258 (61.8% retrace 1.3882 to 1.4867). Initial resistance is now located at 1.4636 (Sept 29 high) at followed by 1.4679 (Sept 26 high).

Yen (JPY)

Yen – 104.35 : Initial support is located at 104.02 (Sept 2 low) followed by 103.54 (Sept 16 low). Initial resistance is now at 107.02 (Sep 25 high) followed by 107.47 (Sept 22 high).

Pound Sterling (GBP)

Pound – 1.8035 : Initial support at 1.7917 (Sept 19 low) followed by 1.7787 (Sep 17 low). Initial resistance is now at 1.8468 (Sep 26 high) followed by 1.8669 (Sep 25 High).

Australian Dollar (AUD)

Australian Dollar – 0.7995 : Initial support at 0.7802 (Sept 17 low) followed by the 0.7676 (Aug 17 2007 low). Initial resistance is now at 0.8380 (Sept 26 high) followed by 0.8469 (Sept 23 high).

Gold (XAU)

Gold – 906 : Initial support at 865.4 (Sept 25 low) followed by 825.12 (Sept 19 low). Initial resistance is now at 924.75 (Sep 29 high) followed by 935 (July 25 high).