USD surges as Stocks Crash
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) surged higher taking many pairs back to levels seen last week when the recovery rally in Equities evaporated and downside remerged. The Catalyst for this stock crash seemed to be the very weak US retail sales in September coming in at -1.2% vs. -0.7% expected. Recession concerns and lingering banking fears provided no support and the slide continued into the US close. Oil slid to 7 month lows and USD safe haven status was reaffirmed. Also released last night September PPI at 0.4% vs. 0.2% expected. In the U.S. share markets, the NASDAQ was down 150 points (-8.47%) and the Dow Jones was down 733 points (-7.87%). Crude Oil closed down -$4.09 ending the New York session at $74.54 per barrel. Looking ahead, Weekly Jobless Claims are seen at 475K vs. 478K previously. Also released, the
European Euro
The Euro (EUR) initially buoyed from the very weak US data but was unable to hold these gains as equity losses mounted and waves of EUR/JPY selling pulled the Euro lower. Large losses in Oil contributed to the fall. Eurozone CPI was at 0.2% vs. 0.1% expected. Overall the EUR/USD traded with a low of 1.3427 and a high of 1.3686 before closing the day at 1.3460 in the New York session.
Japanese Yen (JPY)
The Japanese Yen (JPY) after holding up well to mild losses on the Asian and European Bourses the USD/JPY and Cross/JPY all gave in to mounting US stock losses. AUD/JPY, EUR/JPY and GBP/JPY all fell substantially ending the day on a very weak footing. Japanese Industrial Output was -3.5% in August. Overall the USDJPY traded with a low of 99.42 and a high of 101.92 before closing the day around 99.90 in the New York session.
Pound Sterling (GBP)
The Sterling (GBP) the sterling had an extremely volatile day initially trading higher towards 1.7600 before tracking US stocks lower and bowing to USD strength. The UK claimant rate in September beat expectations at 31.8K vs. 35K forecast. The August Unemployment rate jumped to 5.7% vs. 5.5% previously. Overall the GDP/USD traded with a low of 1.7138 and a high of 1.7601 before closing the day at 1.7200 in the New York session. Looking ahead,
Australian Dollar (AUD)
The Australian Dollar (AUD) was once again the leader on the way down as stocks crashed around the world. Also weighing was the slump in Oil prices down over 5%. AUD/JPY was sold in what has become a standard play in the market lately. Overall the AUD/USD traded with a low of 0.6498 and a high of 0.7074 before closing the US session at 0.6605.
Gold
Gold (XAU) traded in a very whippy style with the initial reaction to the terrible US retail sales date being a pop higher of over $20 before settling back as Oil continued to slide. Safe haven flows kept the precious metal better bid going into the US close as Stock losses mounted. Overall trading with a low of USD$833 and high of USD$856 before ending the New York session at USD$848 an ounce.
Technical Analysis: USD Surges as Stocks Crash
Euro (EUR)
Euro – 1.3434 : Initial support at 1.3405 (Oct 13 low) followed by 1.3260 (Oct 13 trend low). Initial resistance is now located at 1.3690 (Oct 15 high) at followed by 1.3690 (Oct 9 high).
Yen (JPY)
Yen – 99.35 : Initial support is located at 99.00 (Key level) followed by 97.91 (Oct 10 trend low). Initial resistance is now at 104.44 (Oct 15 low) followed by 102.26 (Oct 15 high).
Pound Sterling (GBP)
Pound – 1.7185 : Initial support at 1.6909 (Oct 13 low) followed by 1.6781 (Oct 10 low). Initial resistance is now at 1.7293 (Oct 15 low) followed by 1.7656 (Oct 8 high).
Australian Dollar (AUD)
Australian Dollar – 0.6549 : Initial support at 0.6435 (Oct 13 low) followed by the 0.6331 (Oct 10 low). Initial resistance is now at 0.6970 (Oct 14 high) followed by 0.7239 (Oct 7 high).
Gold (XAU)
Gold – 848 : Initial support at 823 (Oct 13 low) followed by 820 (Oct 2 low). Initial resistance is now at 856 (Oct 15 high) followed by 972 (Oct 13 high).
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